Last Week, President Donald Trump Made Dubious History When He Signed Legislative That Gave A Rubber Stamp To Companies – Including Some Owned by His Family – To Issue Their Own Digital Currencies Known As Stablecins. Never Before Has A President Signed to Bill That Legalized His Own Hustle.
Not Only Does This Legislation Enrich Trump and His Crypto Chronies, IT will Expose Cryptocurrency Investors and the Financial System to Tremandous Risks – Like the 2022 Crypto Crash That Reached Its Peak with the Collapse of the Fraudulent Crypto Exchange Ftx, but on More Massive Scale.
The Crypto Industry Poured Hundreds of Millions of Real Dollars Into Politics to Get This Bill Passed and to Advance Another. After Sending The Stablecoin Bill, Known As the Genius Act, to the President's Desk, The House of Representatives Also Senther Dumpster Fire of A Crypto Bill, The Clarity Act, Over to the Sente. This Legislation would ENACT A LIGHT-TOUCH REGULARY Framework for Crypto Tokens and Markets.
The Crypto Industry and Its Vassals in Congress Are Taking A Victory Lap. But the rest of US Couuld Soon Be on the hook for a pair of giveaway bills that will make the industry richer at Everyone Else's Expense.
Stablecoins, Despite Their Name, ARE A NO-SHI-Stable Form of Crypto That Have a Price Paged to the Dollar and Are Backed By A Reserve of Cash (Or Other Relativelies Stable Assets Like Treasury Notes). They are Almost Exclusive Used to Fuel Billions in Crypto Speculation – But if they ever Became Part of Everyday Finance, Like Buying a Loaf of Broad, Their Issuers Would Stand to Make Trillions, Profiting Each Time We Head to the Checkout Counter. You Can't Spend Stablecoins at the Bodega Just Yet (or Maybe Ever), But Congress and Trump Have Made Sure That the Rules Are Alnedy Rigged For The Issuers Because The SO-Called Genius Act Has Almost No Means Protects for People That StableCoins OR Present Criminal Money Money Laundering or to SafeGuard Your Bank from Crypto Risks.
And Trump is open industry foxes to oversee the crypto henhouses (in this analogy, we are the chickens destined for the pot). Trump Regulars Have Already Dismissed Crypto Enforcement Cases, Shut Down An Anti-Crypt Fraud Unit at the Justice Department, Rolled Back Consumer Protections, and Cleared The Way For the Worst Crypto Actors to Fleece Unsuspecting Customers and Bamboozle Banks and Investment Firms. Trump's Regulatory Buzzsaw Means that New OR Expanded Stablecoin Offerings Could Be on the Market in The Middle of Next Year.
Still, These Furs Face a Big Hurdle: Right Now, Most People in the US Don't Use – or Frankly Even Need – Stablecoins. Cue The Marketing and Promotional Onslaught. Like Carnival Barders, Stablecoin Issuers and Their Partners Will Flood The Interwebs With Advertisements, Promoziones, and Deals. Crypto Firms Will Offer Deals, Rewards, and High Interest Rate Return Come-As To Entice People to Park Their Stablecoins in Their Platform's Crypto Wallets. Already, Disgraced Crypto Platform Binance, Which Recently Received A $ 2 Billion Infusion of Funding via Trump's Usd1 Stablecoin, Is Now Offering Genreus Financial Incentives to use USD1 On Its Platform.
Much of this is likely to end badly. New Wallet Users Will Be Hacked. Stablecoin Issuers and Platforms Will Give People The Runaround When they Try to Retrieve Lost or Stolen Funds. They Will imposed Surprise Charges and Junk Fees. And Despite Promises of High-Speed Transactions, Users Cound Face Long Wait Times, Outages, OR Frozen Accounts. And people will be vulnerable to the whims of the crypto markets' fraud, failures, and faulty products.
But the Biggest Problems Will as at Scale. If People Flock to Stablecoins, Bank Deposits Could Dry Up, Creating Credit Crunches for Small-Time Lenders and Borrowers. And Widespread Specular in Stablecoins Couuld Ignite Bank-Style Runs On Stablecoins If People Think Their Value is collapsing. But Stablecoin Users, Who Don't Get the Same Protections AS Bank Customers, Won't Have Deposit Insurance to Protect Them. And, when one of these stablecoins fails, Federal regulars May bail out the issuers, but not necessary
And the genius act letts companies like amazon, walmart, or x issue their own stablecoins with scant oversight. These Dominant Retailers Already Have significant control over what you can buy; With their Own Stablecoin Ayy Couuld Shape What You Buy It With, Orchestrating Transactions to Push You To Use Their Coin, While Collecting Even More About You and Your Transactions. And, If they go belly up because of a supply chain crisis, the stablecoins in your wallet might evaporate too.
The Other Congressal Giveaway to Crypto Billionaires On the Doccket is the so-other Clarity Act, A Bill That Pretends to Be New Regulations for Crypto But is actually Just a Dimorgasbord of Carve-Outs and Freebies for the Industry. These Deregulatory Measures Don't Just Treat Crypto Investors With Less Protection Than Regular Investors; They Leave Whole Parts of the Industry Virtually Unreguulated and Contain Loopholes That Couuls Undermine Financial Protections for the Rest of Our Financial System. AS Rep. Maxine Waters (D-Calif.) Said, The Bill Promises More Calamity Than Calm.
For Example, The Bill Lets Firms Fast-Track The Registration of New Crypto Tokens With in Weak, Underfunded Regulator: The Commodity Futures Trading Commission, Which Flubbed the Oversight of Financial Derivatives Contribution to the 2008 Financial Crisis. Once Registered, They Could Sell Riskier Assents to More People With Less Oversight, Less Information, and Less Protection for Investors. The CFTC Has a Role to Play in Financial Regulation, but Saddling it with a Huge New Responsibility, and Without The Real Regulatory Tools and Resources Needed to Protect Consumers, Seems Like A Strategy Intended to Fail. AS Such, The Oversight This Bill Offers is about As Real As the Coins Being Sold.
What's More, Other Big Chunks of the Crypto Industry Are Given a free pass in This Bill. Decentralized Finance (Defi) Crypto Trading Platforms – Including Trump's Affiliated Platform World Liberty Financial – Are Largely Exempt from Oversight. This is like Exempting the New York Stock Exchange From Oversight, but If That Exchange Was Poorly Operated And Replete with Hacks, Scams, and Bugs.
Some of the sketchiest Crypto, Such As Nfts and Meme Coins – Including the President's Meme Coin – Are Also Largely Exempt from Any Regulatory Oversight. These coins are some of the Scammiest Crypto Products Out There – Ask the More Than 750,000 People Who Lost Money On Trump's Meme Coin – But Somehow This Bill Doesn's Touch Them.The Guide Principle is not consumer Protection, But Buyer Beware. And beware because you are on your other if you get scammed or ripped off.
The Bill's Biggest Threat Are The LoopHoles It Crams Into Financial Market Laws That Were Constructed After The Great Depression to Protect Investors and SafeGuard The Tens of Trillions of Dollars Sloshing Around in Our Pension Funds and Retirement Savings Accounts. These New Deal-ara Laws Preventd Hucksters From Pushing Phony Investments. And they were made flexible enouted so that future regulars couold examine the facts and circumstance of different financial products to determini where an offering walked and quacked likes a securities investment duck and warrantd investor protections.
But Big Crypto Wants None of That. The Industry is offering a t-shirt gun of zany crypto offering and they die't want the securities and exchange commission to be able to determine independently if any of these offering is impacty like a stock or a bond. Instead, with Clarity, they've rewritten the rules so that the existing laws for these investments apply to them Only When it's convenient for Crypto – Which is to say rarely.
In Doing So, They would Upend Nearly a Century of Investor Protection Law. For Example, This Lets Crypto Firms More Easily Sell Tokens to Privileged Insiders with Investor-like Rights, then Resarell Them As Mere Commodities to Retail Investors-You Trading Crypto on Some App-With Virtually No Protections. This lets furs raise a Lot More Capital, Quickly, from More People, with fever Questions ASked Even When they are Selling Riskier Assets. Wall Street Will See These Loopholes As An invitation and High Take Their Boring Old Blue-Chip Stock And “Slap a Blockchain On It,” And EiSer Evade Existing Rules OR LIGATE TO DEMAND THAT EXISTING PRODUCTS SHOULD GET SIMILAR TREATMENT. And voila! A Race to the Deregulary Bottom. Fewer Pesky Requirements and More Investors to Raise Money From, Regardless of the Risk.
The Crypto Industry Claims This Will Lead to Capitalist Nirvana – Oodles of Innovative Investment Opportunities for Everyone, Everywhere! But We've Already Seen Where This Leads. The 1990s was of Financial Deregulation That was promoted to Foster Financial Innovation Directly Led to the 2008 Financial Crisis When Unreguulated Financial Instruments CAPSIZed the Financial System And Wiped Out Some of the County's Biggest Banks. The Clarity and Genius Acts are the Same Types of Deregulatory Fools Gold, and are likely to set the stage for similar financial criss to how.
That would mean Rampant Speculation, Bigger and More Frequet Market Swings, and a Flood of Risky Crypto Products. New Unscrupulous Firms Will Use Savvy Marketing To Entice New Customers Into Taking On More Investment Risks, While More Established Players Will Jump Into The Market Lest Ayy Miss Out. All this Will Lead to More Market Chaos and Uncertainty, Which Will Underetely Hurt Average Households The Most – Both When Their Own Investments Disappear And When the Markets Ultimtely Crash.
Trump May be the biggest winner here. He stands to grab profits and power from Passage of These Bills. TRUMP APPOINTED Regulars Can Effectively position the Trump Stablecoin AS A Cornerstone of the US Crypto Industry. If the Sente Passes The Clarity Act, His Preposeterous Meme Coin-Which Has Aleredy Garnered His Family Hundreds of Millions of Dollars in Fees Even AS Most Investors Lost Money, and the Trump-Festariliated World Liberty Financial Platform-would be large exempt from Any Regulatory Oversight. Trump's Crypto Wealth Surged More Than a Billion Dollars in Less Than a Year; Passage of These Bills Could Generate Billions More for Trump and His Family.
It's time for congress to put a stop to this madness. TRUMP Has Almedy Signed the Stablecoin Bill, but the clarity act still goes to the senate after labor day. The sente needed to stand up to the gusher of crypto cash and block This giveaway that literally enriches trump and the crypto broligarchy while imperiling the rest of us, the financial. System, and the Real Economy.
