LONDON, July 3 (Reuters) - Europe's largest asset

manager has raised concerns that a boom in dollar-backed

stablecoins in the wake of the United States' GENIUS Act could

cause a major shift in money flows that destabilises the global

payment system.

The U.S. Senate passed the GENIUS Act a bill last month to

create a regulatory framework for the U.S.-dollar-pegged

cryptotokens.

It is expected to be passed by the House of Representatives

and approved by President Donald Trump, leaving other countries

worried about a wave of so-called 'dollarization' of economies

if their own populations buy them.

"It could be genius, or it could be evil," Amundi Asset

Management's chief investment officer Vincent Mortier told

Reuters, voicing his concerns about the U.S. act.

JPMorgan ( JPM ) expects the amount of stablecoins in circulation to

roughly double to $500 billion in the next few years, although

some estimates have put it as high as $2 trillion.

As stablecoins need be pegged to the dollar under the U.S.

act, it will trigger buying of U.S. Treasury bonds. That has its

benefits for the U.S. as it grapples with a gaping budget

deficit, but could also pose problems for the U.S. and other

countries.

"In doing so you create an alternative to the U.S. dollar

and that could lead to more weakening of the dollar," Mortier

said. "Because if a country is pushing a stablecoin, it could be

perceived as pushing the message that the dollar is not that

strong."

Currently, 98% of all stablecoins are pegged to the dollar,

but more than 80% of stablecoin transactions happen outside the

United States.

Italy's finance minister, Giancarlo Giorgetti, warned in

April that the U.S. stablecoin policies presented an "even more

dangerous" threat to European financial stability than Trump's

trade war.

His argument was that access to dollars without needing a

U.S. bank account would be attractive to millions of people and

could undermine countries' monetary sovereignty.

The Bank for International Settlements issued a similar

warning on the risks posed by stablecoins, noting their

potential to undermine monetary sovereignty, transparency issues

and the risk of capital flight from emerging economies.

Mortier, who oversees the 2 trillion euros ($2.36 trillion)

of assets Amundi manages - none of which are in crypto - said he

still had not fully made up his mind about stablecoins, but the

worry was that a mass uptake could impact financial stability.

As well as the dollarization issue, they would become

"quasi-banks" he said, as people will deposit money in a coin

assuming they can take it out again whenever they want. They

will also be used as a direct means of payment.

"It could potentially destabilise the global payment

system," he said. "I'm not so sure it's a good idea".

($1 = 0.8483 euros)