For many, the passage of the GENIUS Act closed the doors on the creation of a Central Bank Digital Currency (CBDC). Stablecoins, though digital, were marketed as a private form of currency, in contrast to a government-issued digital dollar.

Aaron Day, a fellow at the Brownstone Institute and a staunch critic of the crypto industry, argued that the GENIUS Act facilitates increased government surveillance despite this ban.

Surveillance Concerns Under the GENIUS Act

The GENIUS Act explicitly prevents the Federal Reserve from issuing a CBDC directly to individuals or through a third party. Its goal was to block the creation of a government-issued digital dollar at all costs.

Its July 2025 passage tied in nicely with President Trump’s early campaign promises to oppose the creation of a CBDC, describing it as a form of tyranny. 

According to Day, stablecoins and CBDCs are essentially the same thing. The only difference is that the former is privately issued, whereas the latter is issued by a central bank. Yet, as long as the government is involved, the degree of surveillance remains the same.

“The issuance by the Federal Reserve is not actually the part of this that people are concerned about. The Federal Reserve is a private organization that is a collection of banks. Whether you end up having a stablecoin issued by Jamie Dimon at JP Morgan Chase or by the Federal Reserve doesn’t matter,” Day told BeInCrypto.

What privacy-preserving people are really concerned about, he argued, is a government entity being able to program, track, and censor money. 

This line of thinking has prompted him to define the GENIUS Act as a “backdoor CBDC.” Day highlighted the urgency of the issue, especially given the exponential growth in stablecoins.

“Last year, there was $33 trillion worth of stablecoin transactions. Globally, this is larger than the amount processed through Visa,” he said, adding, “What they’ve done essentially is they’ve taken stablecoins… and they put [them] under the surveillance and control of Congress.”

According to him, this level of surveillance already existed before the passage of the GENIUS Act. The recently signed bill only represents a new degree to an already established order.

Day noted that most of the dollar is already digital.

When asked for examples, he pointed to the Bank Secrecy Act (BSA). This legislation, passed in 1970, requires financial institutions to assist government agencies in detecting and preventing money laundering, terrorism financing, and other illicit activities.

According to Day, the BSA allows government agencies to engage in overreach in certain contexts.

“We have something called suspicious activity reports. Anytime you do a financial transaction through your bank greater than $10,000, a report is automatically generated and sent to the Treasury Department. This shows you that we already have tracking within the system,” he said.

While these tools are often used for public protection, government agencies can implement them without specific authorization.

Day pointed to a specific example. In March 2025, the Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury Department, issued a geographic targeting order to combat money laundering activities in the southwest border of the United States. 

As part of that order, FinCEN mandated that money services businesses in 30 ZIP codes report transactions over $200.

“Understand what this means. The Treasury Department, without Congress, without a bill, without a law, can simply send a memo and banks will start adjusting the dollar transaction amount with which they start automatically reporting to Treasury,” he said.

In light of these examples, he argued that surveillance frameworks already exist. The GENIUS Act merely allows Congress to supervise stablecoins, potentially expanding control over digital currencies in ways that mirror those of a CBDC.