Crypto Long & Short: The GENIUS Act’s guarantees don’t cover DeFi lending
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The GENIUS Act’s stablecoin safeguards do not extend to DeFi lending, leaving lenders exposed to governance votes and oracle failures that can alter loan terms after capital is deployed, according to Ajna’s Mike Hathaway and Joseph Quintilian. The authors argue that institutions evaluating DeFi markets should focus less on which venues appear safest and more on who holds the power to change a loan’s terms post-funding. Fully backed stablecoins offer no protection when a token vote or a faulty price feed moves the goalposts, they contend. The distinction matters as institutional capital weighs entry into on-chain credit, where legal guarantees stop at the stablecoin wrapper. What to watch next is whether DeFi protocols tighten governance and oracle safeguards, or whether lenders demand structural protections before scaling allocations.
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Named in this story
Ajna, GENIUS Act, Mike Hathaway, Joseph Quintilian