March 14, 2025 (EIRNS)—Cryptocurrency issuers are (according to American Banker and to the crypto website CoinDesk) expecting a White House Executive Order and legislation advancing in both Houses of Congress, to give them access to Federal Reserve payment systems, for example to be able to be used to purchase U.S. Treasury bills. At the “cryptocurrency summit” at the White House March 7, this prospective order, along with the Senate bill called the GENIUS Act, were being counted on to begin to make “stablecoins” into a kind of legal tender alongside the dollar, U.S. Constitution be damned.
The GENIUS Act is accompanied by the House legislation called the STABLE Act—each has come out of the leadership of the respective house’s committee on financial services, and each is backed by the White House and its “team of billionaires” working formally or informally for President Donald Trump. The legislative purpose is to authorize licensing of firms which issue “stablecoins” to use them to buy U.S. Treasury securities—specifically Treasury bills, the shortest-term Treasuries.
This, it is claimed by the manic billionaires, will goose the demand for U.S. Treasury debt worldwide, because it will be so much more convenient to buy a stablecoin over the Internet like Tethercoin (Tether is the biggest stablecoin issuer by far) and get ownership of a Treasury bill. After all, the demand for Treasuries is lagging further and further behind the astonishing rate of continuing issuance of U.S. Treasury debt that must be sold, making the Treasury market more speculative and volatile.
But the claim that any stablecoin will be stable and “worth” exactly one dollar at all times (supposedly because of the Treasury bills held as their backing) is belied by the fact that a crypto coin has yet to be seen that: is stable in value, has a stable and solvent issuer, and is safe and secure from criminal networks, hackers and scammers. The GENIUS and STABLE Acts make this worse, by specifically allowing issuers to speculate in the “repo” derivatives markets with the Treasuries they are holding. Let one big “stable"-coin issuer be taken down by a run, a big hack, or a sudden big speculative loss, and the extra demand then thrown on Treasuries could destabilize the world’s largest securities market.
Even among the enthusiasts at the March 7 “crypto summit,” the head of research for Circle—the issuer of the stablecoin token called USDC—acknowledged: “Large banks have been experimenting with blockchain for years. It’s not a new tech for them. But supporting crypto for payments, has been viewed as risky.” Indeed: His own USDC “stable” coin dropped in one 2023 incident from the promised $1 to just nine cents.