Stablecoin Recovery Gap Spurs Debate Over GENIUS Act and Calls for Standardized Rules

U.S. discussions around the proposed GENIUS Act have intensified as critics warn that stablecoin issuers may be able to freeze stolen assets without clear mechanisms to return funds to victims. Industry figures such as Circuit chief of staff and Circle Alliance Program lawyer Kieran Donnelly argue the core challenge is operational, citing slow, high-friction recovery decisions and the lack of uniform procedures across issuers. Donnelly also highlights broader concerns around self-custody risks, the emergence of stablecoin-native payment rails, and the impact of political timelines on how quickly a comprehensive regulatory framework is finalized.