Recently, the issuance of stablecoins has become quite popular in the U.S. financial sector, so let me explain what’s going on.

In July of this year, the U.S. Congress introduced the "Genius Act," which states that traditional financial issuers of stablecoins cannot offer interest to users. This statement may not seem problematic at first, but it actually puts banks in a tough spot. Banks can issue stablecoins but cannot provide interest, while exchanges like Binance can benefit users with stablecoins like USDT, USDC, and FDUSD issued by others. Is this fair? Who would want stablecoins from banks that offer no interest or benefits? Everyone knows traditional cryptocurrencies allow for interest on holdings, so it’s obvious which stablecoins people would prefer. With this situation, you can understand why banks are anxious. They went to Congress to complain, arguing that this constitutes a regulatory loophole. After all, if users transfer all their money from banks to crypto platforms, the Treasury estimates that as much as $6.6 trillion in deposits could be moved. Once that money leaves the banks, they can no longer lend it out, making it harder for ordinary people and small businesses to borrow money, which would drive up interest rates. On the other hand, crypto platforms are certainly not backing down, claiming that banks fear competition and want to monopolize the market.

More critically, the Trump administration has been stirring the pot from behind the scenes, promoting cryptocurrencies all along. His goal has been to counterbalance the Federal Reserve. The Federal Reserve has always controlled the U.S. money supply. Trump wants everyone to withdraw their money from banks and transfer it to cryptocurrencies to weaken the Federal Reserve's control. He also has plans for stablecoins to purchase U.S. Treasury bonds, helping the government alleviate its debt pressure.

The current market is essentially a financial struggle between the Federal Reserve and the Trump administration. Looking back at history, several presidents who interfered with U.S. monetary policy have not fared well. I wonder if the old wizard has thought that he is already halfway in the grave and adopts a nonchalant attitude to challenge the Federal Reserve?