Rachael Horwitz

The Financial Times take on stablecoins ladies and gentlemen

I’ve always thought “wallet” is not the best name for what we are talking about in crypto and kinda misleading, bet people who don’t pay attention to crypto are confused today. What do you think is a better name for the function of crypto wallet?

I think crypto legislation in the form of the GENIUS Act passing is really similar to the encryption wars of the 90's. Like encryption, crypto has potential for both innovation and carries new legal/social risks. In the 90's the U.S. faced a choice: restrict a powerful technology out of fear, or embrace and regulate it wisely.

We embraced encryption (after a lot of backlash to the Clinton admin earlier proposals) and the result is the secure web, e-commerce, messaging, and the modern internet as we know it.

GENIUS represents a really similar crossroads IMO.

Next time someone claims crypto is uniquely dangerous for sanctions evasion or terror financing, remember this story: in 2023, Iran-backed militias exploited Visa & Mastercard networks to move billions using prepaid cards, cross-border arbitrage, and FX gaps in Iraq.

$450M+ in profits for U.S.-sanctioned groups. So while Visa/Mastercard themselves didn’t violate sanctions (since their Iraqi partners weren’t sanctioned at the time), the scheme functionally enabled sanctioned entities to circumvent U.S. restrictions. All of this happened using traditional financial plumbing considered safe and compliant.

Boring (cool) stuff w/ tailwinds in crypto:
> Payments (stablecoins)
> Tokenized assets
> Going public onchain
> Zero knowledge proofs (data privacy)
> Crypto-native social media
> Next chapter for DeFi - accountability, transparency, institutional-grade rigor for auditable, programmable finance

I really need X to work b/c can you imagine talking about stablecoins on Bluesky?

“As confidence in emerging technologies like crypto and digital assets grows, clients are increasingly open to using stablecoins to streamline payouts, navigate currency fluctuations, and settle with third parties in regions where digital assets are preferred,” John McNaught, head of payouts at Worldpay, said in a news release provided to PYMNTS.

The attempts to position the most boring part of crypto (payments!) as a fever dream of financial anarchy is as bad faith as it is transparent. It’s a boring bill to regulate boring tokens that make dollars programmable, open, and interoperable. That's definitely quietly revolutionary but for regular people who use money on the internet every day.

The Genius Act is basically a regulatory catch-up and while exciting to me, it's actually a straight forward technocratic bill. Stablecoins are literally just a dollar on the internet. A fully reserved, tokenized version of the dollar that can move 24/7, settle in seconds, and be programmed like software.

These authors in this extremely silly piece warn stablecoins might break the dollar system. They *are* the dollar system!! 🤦‍♀️ But better b/c when money moves as easily as email, people don’t need to wait days to get paid, or pay $30 for a wire, or be excluded from the system entirely because they don’t have the right bank or passport. That's why the demand for dollar-backed stablecoins is so huge (even without regulation).

Honestly critics using everything they have on this easy-to-support common sense bill and choosing *not* to keep their powder dry for market structure is very telling.

The attempts to position the most boring part of crypto (payments!) as a fever dream of financial anarchy is as bad faith as it is transparent. It’s a boring bill to regulate boring tokens that make dollars programmable, open, and interoperable. That's definitely quietly revolutionary but for regular people who use money on the internet every day.

The Genius Act is basically a regulatory catch-up and while exciting to me, it's actually a boring, technocratic bill. Stablecoins are literally just a dollar on the internet. A fully reserved, tokenized version of the dollar that can move 24/7, settle in seconds, and be programmed like software.

These authors in this extremely silly piece warn stablecoins might break the dollar system. They *are* the dollar system!! 🤦‍♀️ But better b/c when money moves as easily as email, people don’t need to wait days to get paid, or pay $30 for a wire, or be excluded from the system entirely because they don’t have the right bank or passport. That's why the demand for dollar-backed stablecoins is so huge (even without regulation).

Honestly critics using everything they have on this easy-to-support common sense bill and choosing *not* to keep their powder dry for market structure is very telling.

Crypto people now that lots of normal people want to talk to us (about stablecoins)

Really important to build the muscle from day one to lead through the noise. Crypto founders are particularly good at this because of the nature of this ecosystem.

Thanks @axios!