When tech giants are allowed to operate like banks, are we really ready to face the next 'Lehman moment'? If these platforms are too big to regulate and too big to save, are we embracing the future or sowing the seeds of the next crisis?
Recently, the U.S. Senate is advancing a landmark piece of cryptocurrency legislation—the (Stablecoin Uniform Standards Guarantee Act) (GENIUS), aimed at establishing a nationwide unified framework for the issuance and operation of 'payment stablecoins.' It sounds like a major step forward for the crypto world, but the underlying concerns are more unsettling than they appear on the surface.
One piece of legislation turns tech giants into 'shadow banks'?
The bill allows companies to issue stablecoins under certain conditions but imposes almost no limits on tech giants. Platforms like Meta, Amazon, and Google, if allowed to issue and operate stablecoins like banks, would directly bypass traditional financial regulation, creating their own 'closed-loop monetary systems.' Essentially, they would have more financial influence than traditional banks, while regulation fails to 'upgrade synchronously.'
Hilary Allen, a law professor from an American university, pointed out that this arrangement makes her 'uneasy.' She participated in the congressional committee that studied the 2008 financial crisis, and she warns:
'This bill will allow the largest tech platforms to essentially become equivalents of banks… Their scale far exceeds that of the 'too big to fail' financial institutions in 2008.'
Putting hope in '100% cash reserves'? Don't be too naive.
Supporters of the bill claim that as long as stablecoins have sufficient cash reserves backing them, they can avoid financial risks. But reality is far more complex. Allen points out: money market funds are structurally similar to stablecoins, and panic-driven runs occurred in 2008 and 2020, forcing the government to intervene.
Let’s not forget that in 2023, when Silicon Valley Bank (SVB) collapsed, the government stepped in to rescue USDC—it had over $3 billion in reserves at SVB. That incident was not a wake-up call; it was a rehearsal.
'We are sliding towards a situation where we must backstop tech giants; this is not a free market at all, but a form of implicit nationalization,' Allen frankly stated.
Where is consumer protection? Regulation is like a facade.
In addition to systemic financial risks, the bill is nearly blank in terms of consumer protection and restrictions on tech companies issuing currencies. Eswar Prasad, a professor at Cornell University and author of (The Future of Money), points out that this bill appears grand but is full of loopholes. He emphasizes:
'Under the relaxed regulations for crypto during the Trump era, these safeguard clauses will probably not be enforced at all.'
Regrettably, some Democrats who initially strongly opposed the bill have begun to 'switch sides.' Virginia Senator Mark Warner stated, 'Blockchain technology is unstoppable; if we don’t shape it, others will.' This sounds like a concern about America's 'technological sovereignty,' but more like an excuse to give tech giants a green light.
Mlion.ai Perspective: As the market moves toward 'platform financialization,' how should we protect ourselves?
Regulatory lag, systemic risk, and high opacity… this is precisely the era that is most difficult for ordinary investors to navigate.
We are witnessing the convergence of the crypto market with traditional tech platforms, but it also exposes the extreme asymmetry of information required for investment decisions. In this context, identifying trends, uncovering risks, and discovering opportunities amidst uncertainty becomes particularly important.
This is where Mlion.ai can play a role.
Using AI price prediction models to analyze stablecoin dynamics, the blockchain layout of tech platforms, and market feedback in real-time;
Quickly capturing the potential impacts behind policy changes through in-depth analysis features;
Combining AI-generated research reports with on-chain data insights, users can grasp macro and micro trends quickly without a professional background.
The future of the crypto world is no longer just about the 'crypto circle'; it is also a place for ordinary people to hedge and find opportunities in asset allocation. In the face of the rise of 'tech financial giants,' utilizing Mlion.ai's AI tools may be your smartest choice.
Disclaimer: The above content is for informational sharing only and does not constitute any investment advice!
