American investor and stockbroker, Peter Schiff, has aimed at USD pegged stablecoins, calling them “flawed” tokens tied to a currency that steadily loses value.
Schiff says relying on dollar tokens makes little sense when the greenback itself is depreciating.
His comments came as the GENIUS Act closer to a final Presidential passing. The bill aims to regulate stablecoins and set clear rules for issuers
Trump’s Backing of the GENIUS Act
A day earlier, President Donald Trump urged House members to pass the GENIUS Stablecoin bill without delay so he could sign it immediately.
He hailed the law as a way to make the U.S. the “undisputed leader in digital assets.” Trump’s support highlights how stablecoins have become a hot political issue, with both sides seeing them as a path to strengthen America’s role in global finance.
Also Read: Senate Democrats Move to Block Presidential Profits from Stablecoins in GENIUS Act Amendment
Schiff’s Challenge
On the X(Twitter) platform, Schiff wrote that he understands Bitcoin but not dollar stablecoins.
He asked why anyone would accept a token backed by a “flawed fiat currency like the dollar” instead of one tied to gold.
Gold‑Backed Stablecoin Plan
Schiff, an American stockbroker and financial commentator did more than just criticise. He revealed plans to launch his gold‑backed stablecoin. According to him, this coin would offer the same ease of use as USD stablecoins but with a built‑in safety net.
Holding gold instead of paper, he claims, would protect users against inflation and currency devaluation over time.
Liquidity Versus Value
The key point in Schiff’s view is that gold‑backed tokens can match the liquidity of dollar coins. Traders can move in and out of positions quickly. Yet the value inside the token would not erode as the dollar does. He says this mix of stability and speed makes gold tokens a superior choice for both traders and long‑term holders.
Schiff noted that most people use stablecoins only for crypto trading. They serve as a temporary place to hold value while swapping between volatile coins.
He doubts they will ever catch on as a true medium for daily transactions. For him, a token that simply follows fiat rates offers no real innovation.
GENIUS Act’s Rocky Road
Despite hopes for a quick win, the GENIUS Act had a bumpy ride. Lawmakers expected it to be the easiest crypto bill to pass. Instead, it lingered for months before reaching the Senate floor.
It failed once and only moved forward after intense talks between committees. The slow pace surprised even veteran senators.
“We thought it would be easiest to start with stablecoins,” said Sen. Cynthia Lummis of Wyoming at the Bitcoin 2025 conference in Las Vegas. She admitted she did not realise how tough the negotiations would be. Her comments show that even stablecoin rules face heavy scrutiny and political hurdles.
With the House vote looming, the GENIUS Act will decide how stablecoins fit into U.S. law. Trump’s backing gives the bill extra momentum. Schiff’s gold‑backed token proposal adds fuel to the debate over what should back digital cash.
As regulators, politicians and investors weigh the options, the future of stablecoins will hinge on finding the right balance between innovation, value and trust.
Also Read: JPMorgan Pilots JPMD Deposit Token On Coinbase’s Base Network Amid GENIUS Act Passing