Rep. Warren Davidson Warns GENIUS Act Could Turn U.S. Into a “Surveillance State”

Rep. Warren Davidson has warned that the stablecoin‑focused GENIUS Act risks transforming the United States into a “surveillance state,” arguing that the legislation could pave the way for wholesale central bank digital currencies (CBDCs) and digital identity systems that undermine Americans’ financial freedom and privacy.

Davidson’s Core Concerns

According to Davidson, while the GENIUS Act is framed as a regulatory framework for stablecoins, its structure could:

• Enable wholesale CBDCs by allowing government‑linked digital settlement systems
• Expand financial surveillance, increasing monitoring of transactions
• Lay groundwork for digital ID integration, linking identity to financial activity

He argues that these developments could erode constitutional protections and give the federal government excessive visibility and control over individual financial behavior.

Privacy and Financial Freedom at Risk

Davidson has long opposed CBDCs, warning that programmable money and identity‑linked payments could allow authorities to:

• Track transactions in real time
• Restrict or condition spending
• Freeze or deny access to funds without due process

In his view, even indirect or “wholesale” CBDC models could evolve into consumer‑facing systems over time.

Broader Policy Debate

The comments underscore a growing divide in Washington over digital asset legislation:

• Supporters say stablecoin regulation is necessary to protect consumers, ensure dollar dominance, and bring clarity to markets
• Critics warn that poorly designed laws could centralize control and expand state surveillance

The GENIUS Act sits at the center of this debate, as lawmakers weigh innovation and competitiveness against civil liberties.

What Happens Next

The bill is expected to face continued scrutiny as it moves through Congress, with amendments likely focusing on:

• Explicit prohibitions on CBDCs
• Stronger privacy protections
• Clear limits on data collection and identity requirements

For now, Davidson’s warning highlights a key fault line in U.S. crypto policy: how to regulate stablecoins without compromising financial privacy and freedom.