Why GENIUS could leave digital dollars vulnerable to sudden blockchain network ‘bank runs’
A Federal Reserve staff paper shows how congestion and weak network effects can push holders toward redemptions or chain migration even with safe backing. The post Why GENIUS could leave digital dollars vulnerable to…
The Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act, is the new federal framework for payment stablecoin issuers. Its reserve rules aim to make each token a safer dollar claim, while the public blockchains moving those tokens retain their own fee markets and capacity limits. A Federal Reserve staff paper , first dated June 2, 2026, and updated Aug. 31, 2026, models how transaction congestion can destabilize even a perfectly backed digital dollar. The authors are Federal Reserve economists, and the paper carries the standard disclaimer that their views do…
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