An entirely new sub-specialty within the field of economics is called for, focused on the study of the speculative cancer that has now metastasized across the entire Western financial system. A cross between oncology and economics, it could be called “Onconomics.”
Consider what is afoot with cryptocurrencies and the sub-category of stablecoins—crypto that supposedly maintains a fixed value by pegging it 1-1 to a reserve asset such as the U.S. dollar or gold. China’s Central Bank on Feb. 6 restated that these speculative financial instruments are banned, and also closed the door on the overseas issuance of stablecoins pegged to the renminbi without prior approval. Ben Charoenwong, an associate finance professor at the Insead business school in Singapore, explained to IFRE: “The risk of stablecoins circumventing capital controls is real and growing. Beijing is protecting the banking system and its capital account regime.”
In the United States, on the other hand, the cancer has been invited to take up residence in the U.S. Treasuries market, the bedrock of the entire Western financial system. As the Financial Times’s Gillian Tett reported, “A few days ago, a startling detail emerged about the US Treasuries market. Corporate reports from Tether, the world’s biggest stablecoin, show that the El Salvador-based group made $28.2 billion net purchases of US government bonds in 2025—making it the seventh-biggest offshore buyer. That beats new purchases from countries such as China. Indeed, the combined gross Treasuries holdings of Tether and Circle (the second-biggest stablecoin group) now easily exceeds those of investors in countries such as South Korea and Saudi Arabia.”
Tett thinks “This is startling,” but admits that U.S. Treasury Secretary Scott Bessent thinks it’s a good thing, because he is of the belief that stablecoins can “absorb America’s ever-swelling debt issuance. He also thinks the sector could expand from its current $300 billion size to $3 trillion soon.”
Although stablecoins, by law, can’t pay interest on deposits, permitted third parties, like Coinbase exchange, are allowed to do so. In addition to the danger that derivative products based on such stablecoin exchanges could blow out and take down the Treasury market with them, the large commercial banks, such as JPMorgan Chase, are “terrified that they will lose retail deposits to stablecoin products, since the latter pay more interest,” the FT writes. “Stablecoin growth will reduce bank deposits and lending,” the Bank Policy Institute argues, warning that this flight would curb US credit and “increase the risk of a financial crisis,” akin to 2008.
