GENIUS Act grants stablecoin holders super-priority status in bankruptcy, giving them the legal right to recover their money before other creditors

Quotes that support claims

The legislation includes language regarding bankruptcy, granting stablecoin holders "super-priority status in bankruptcy proceedings, giving them the legal right to recover their money first in the unlikely event of an insolvency and protects existing bank depositors from reserve claims from an issuer," according to a fact sheet.

According to Section 9 of the bill, stablecoin holders get priority over other creditors in the event of issuer insolvency. This could create serious problems if banks or major corporations begin issuing stablecoins.