New York Attorney General Letitia James and four district attorneys have criticized the federal GENIUS Act, warning it could inadvertently protect stablecoin issuers from accountability and expose consumers to fraud. In a letter, they argued the act might provide legal cover for illicit activities by issuers like Tether and Circle, potentially undermining consumer protections as digital payments become more prevalent. The letter highlights concerns that the GENIUS Act could create loopholes, allowing fraud in the stablecoin sector by lacking robust consumer protections and enforcement clarity. It contrasts Circle's regulatory compliance focus with Tether's case-by-case approach, suggesting uneven consumer safeguards. The act, signed into law by Donald Trump, sets a timeline for implementation that could keep regulations in flux, with state authorities pushing for stronger enforcement tools. The debate underscores the tension between federal and state regulatory approaches, with New York officials advocating for tighter guardrails to balance innovation with consumer protection. As stablecoins gain traction in payments, the regulatory landscape remains a critical focus for market participants and policymakers.