Arthur Wilmarth, who is professor emeritus at the George Washington University, warns that Stablecoins, far from sustaining US debt, have become the preferred tool for illegal activities. Prof. Wilmarth bases his warnings on a Bloomberg article reporting that over 70% of the two largest Stablecoins, USDT and USDC, are in accounts which use encrypted keys to hide the identity of their owners. Another 26% are held on unregulated crypto exchanges, and only 3% are held in regulated crypto exchanges.
This means that, being the total value of USDT and USDC issued by Tether and Circle, 257 billion USD, there are over 247 billion USD stablecoins, redeemable in US Treasuries, that avoid any regulation or control. In the Bloomberg article cited by prof. Wilmarth, Harvard University economist Gita Gopinath is quoted saying: “Stablecoins are now the predominant form of identified illicit activity.”
EIR has warned about the economic incompetence behind US Treasury Secretary Scott Bessent’s idea to rollover US Debt through Stablecoin. It is paper on paper, which adds debt to debt, while shortening its maturity.
