The Honeymoon Is Over: Stablecoins, ISO 20022, and ‘Salt Typhoon’—Your Phone Is the New Bank Branch

1) The law that lit the fuse: GENIUS Act In July, Congress passed—and the President signed—the GENIUS Act, America’s first comprehensive federal framework for payment stablecoins. It greenlights permitted issuers (bank and non-bank) to mint dollar-pegged tokens fully backed by cash/T-bills, with monthly reserve disclosures and AML obligations. Translation: Washington just put a formal stamp on “digital cash”—but not your cash. It is programmable, surveillable, and lives where it’s most vulnerable: on your phone. See the bill on Congress.gov: S.1582 – GENIUS Act (now Public Law 119-27). (Congress.gov) Policy wonks are already dissecting loopholes—like “rewards” on stablecoin balances that look and feel like bank interest without bank rules—creating incentives to siphon deposits out of community banks and into crypto platforms.…