That is the headline on a lengthy, scholarly article by Arthur E. Wilmarth published on Oct. 6 by the Institute for New Economic Thinking website, a New York City-based nonprofit think tank that was founded in 2009 in the wake of the 2007-2008 financial blowout. Wilmarth is Professor Emeritus of Law, George Washington University, and has authored numerous publications, including the 2020 book, Taming the Megabanks: Why We Need a New Glass-Steagall Act.
The full article is well worth reading, and it corroborates much of what EIR published earlier this year on the deadly nature of stablecoins and the GENIUS Act, as well as necessary policy solutions to the problem.. We provide the reader with excerpts of Wilmarth’s article:
“The GENIUS Act authorizes nonbanks to issue uninsured stablecoins to the public without the essential safeguards provided by federal deposit insurance and the prudential regulations governing FDIC-insured banks. In addition, the GENIUS Act gives federal and state regulators broad authority to allow nonbank stablecoin issuers to sell highly-leveraged crypto derivatives and other speculative crypto investments to the public….
“Stablecoins are primarily used as payment instruments for speculating in crypto-assets with fluctuating values, with about 90% of stablecoin payments being linked to crypto trades. Stablecoins are also widely used for conducting illicit transactions. In 2023, stablecoins were used as payment instruments for 60% of unlawful cryptocurrency transactions (including crypto scams, ransomware, evasion of capital controls, money laundering, and tax evasion) and 80% of all cryptocurrency transactions conducted by sanctioned regimes and terrorist groups.…
“More than 20 stablecoins collapsed between 2016 and 2022….
