As the GENIUS Act was passed by the U.S. House of Representatives on Friday, July 18 and signed by President Trump on July 19, nothing now stands in the way of the total destabilization of the U.S. dollar. Meanwhile, Circle, the stablecoin issuer which BlackRock has invested in, has become the largest issuer of these “dollar” tokens, surpassing Tether, Ltd. This is reportedly thanks to the European market, which was abandoned by Tether because of the Markets in Crypto-Assets Regulation (MiCA) pseudo-regulations. At the same time as Tether’s departure, which involved Tether coins being “delisted” in Europe by the blockchains which play host to these electronic ersatz “dollars,” the volume in dollar equivalents of the stablecoin issued by Circle, which is called USDC, has increased by 29 times.
“Stablecoins” are electronic tokens whose issuers claim they will always be worth exactly one dollar, because the issuers buy Treasury securities to back them. As “stablecoins” proliferate, however, they will actually have differing values even in the best of circumstances. Tether’s stablecoin, for example, has varied in value, just over the past year, by half a cent above and below one dollar. And “If there is ever a run on a large [stable-]coin, all these Treasuries would need to be sold quickly—potentially causing a financial crisis,” wrote Bloomberg columnist Allison Schrager in the linked July 18 Bloomberg News article which charts Tether vs. real dollars.
