10 Ways Gov’t-Compliant Stablecoins Are Functionally No Different Than CBDCs

Some celebrate Washington’s embrace of stablecoins. In practice, it builds a switch to seize, block, and track. This is CBDC behavior with corporate branding. There’s a better path.

Some folks in the libertarian crowd are seeing the GENIUS Act as a win—a sign that the government finally gets crypto, fostering innovation under a federal framework. In theory, that would be amazing… if it were true. But when you look closer at what this legislation does and how it treats stablecoins, you find a Trojan horse: a path toward programmable money, surveillance, and control—all under the guise of legitimacy. So, in an attempt to remove the wool from the eyes of those who still don’t see it, here are ten reasons government-compliant stablecoins are practically indistinguishable from CBDCs.

What the GENIUS Act Actually Does

The Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025, or the GENIUS Act, creates the first federal regulatory framework for payment stablecoins. It mandates 1:1 backing with U.S. dollars or Treasuries, subjects issuers to AML/KYC rules, and orders regular reserve audits. Crucially, it even requires that issuers have built-in tech to freeze, seize, or burn stablecoins on command—turning them into permissioned digital money. The law passed with overwhelming bipartisan support, a rare feat outside war or corporate bailouts.

10 Reasons Why Compliant Stablecoins Are Just CBDCs in Disguise

1. On-Demand Asset Seizure
   GENIUS forces issuers to build technical systems that comply with lawful orders to freeze, block, or burn tokens. That’s programmable censorship baked directly into the system — just like a CBDC. 
2. Identity Surveillance
   Issuers become financial institutions under the Bank Secrecy Act, requiring full KYC, identification programs, transaction monitoring, and Suspicious Activity Reports. This exposes every transaction to tracking—just like central bank systems.
3. Control Over Issuers = Control Over Money
   Only those sanctioned by the OCC or state regulators can issue these coins. Millions could be locked out if you’re not “approved,” mirroring the state control seen in CBDC regimes.
4. Sanctions and Compliance by Design
   GENIUS requires OFAC screening and full sanctions compliance from issuers. It essentially integrates capital control and politically-driven censorship directly into financial rails.
5. Bankruptcy Immunity for Reserves
   Under the Act, stablecoin reserves are shielded from bankruptcy claims—they take priority over wages, taxes, and all other creditors. The consumer might be protected, but issuers are not—creating a terrifying imbalance of power. ()
6. Shifting Governance to Corporations
   By creating corporate intermediaries that control freezing, redemption, and issuance, GENIUS shifts what would be direct government surveillance to a corporate layer that acts on government orders. It’s CBDC behavior, just with private actors. 
7. Extraterritorial Enforcement
   Foreign issuers must meet U.S. AML and sanctions standards—or lose access to the U.S. market. That’s the kind of jurisdictional reach typical of CBDC systems.
8. Reserve Requirements as Monetary Policy Tool
   Requiring exclusive backing with cash or Treasuries means stablecoin issuance now becomes a tool to indirectly influence demand for government debt. That’s monetary steering through crypto—another CBDC hallmark. 
9. Interoperability Means Shared Surveillance Interfaces
   GENIUS mandates interoperability standards enforced by regulators. Once they’re standardized, all surveillance and control features can be baked consistently across multiple platforms.
10. Real-World Precedent Validates the Risk
    Stablecoin issuers have already demonstrated freeze capability: Tether froze $225M (2023), $46M (2022), and $160M (2022) at authorities’ requests. USDC froze $100K (2020) and blacklisted Tornado Cash. Ledgers that can be wiped at a moment’s notice are no different from centralized money under CBDC logic.

How This Harbingers a Permissioned Future

All the safeguards promised by the GENIUS Act—reserve transparency, consumer protection, auditability—sound good until you realize they empower control, not freedom. The result? A financial system where money is programmable, freezeable, and trackable—controlled by issuers who must obey the state.

Time to Exit to True Financial Autonomy

If you thought stablecoins were a refuge, the GENIUS Act just turned them into a white-label CBDC. The answer isn’t better government-compliant stablecoins—it’s privacy by design. Projects like Zano and tools like the Confidential Layer are the only real firewall left. Also, they have their own stablecoin, and it’s the exact opposite of everything you read above. These solutions and others like them offer a path to escape the permissioned chains before the cage closes in. 

Because once your money can be taken without cause, it’s no longer yours — it’s only yours until someone in power says otherwise.