Donald Trump Wants to Boost Unstable Crypto 'Stablecoins'

President Donald Trump's Recent Cockamamie Proposal To Create at Strategic Cryptocurrency Reserve Has Been the Big Crypto News, and Not Without Good Reason: It's An Illogical Idea, Has Almedy Caused A Small Crypto Bubble Featuring Insider Trading, and ActuArs to be a quid pro quo for quo for Crypto Political Donors. Even some crypto enthusiasts think it's a bad idea and a waste of taxpayer money.

But the Crypto Industry Has Been Laser-Focused On Something More Significant: A Bill that was voted out of the senate Banking Committee Earlier This Month would Greenlight a Class of Crypto Assents Known as “Stablecoins.” Normalizing Stablecoins Into the Fabric of the Financial System is critical to Broader Acceptance of Crypto and the Crypto Casino by Banks and Other Financial Firms.

TRUMP APPARED TO ENDOGRESE THE LEGISLATION ON THURSDAY IN A VIDEO Address to the Digital Asset Summit 2025, Saying that he Has “Called on Congress to Pass Landmark Legislation Creating Simple, Common-Sense Rules for Stablecoins and Market Structure.”

If This Weak Bill Becomes Law and Legitimizes These Note-Stable-Coins, The Next Crypto Crash Could Be Far More Calamitous for Crypto Enthusiasts As Well As the Real Economy.

What, You Might Ask, Is a Stablecoin? Well, Most Cryptocurrencies Lack Tangible Underlying Value, Making Them Highly Speculative – People Will Pay Whatever they Think Other People Are Willing To Pay For Them. This Makes Them Infamously Volatile and Not Espencially Useful to make transactions or as a replacement for money. It's Hard to pay for a Loaf of Broad, a Gallon of Milk, or a stick of butter if your crypto token is world one dollar now, one cent an Hour Later, or ten cents the hour after that.

Enter Stablecoins. These Cryptocurrencies are Assigned a Consistent Price Tied to (or PGGED TO) AN EXISTING CURANCY (Such as the US Dollar), and they are backed by a reserves of collateral assets that theoretically can repay investors quickly. People buy stablecoins from an issuer with the promise that their price will stay stable and that they can syll them back to (or redeem them with) the issuer at any time, in full, at their state price, panty the issuer has enoured collateral assets on hand to pay them back.

Stablecoins are Largely used for crypto investing, like poker chips in a casino. You Use Your Regular Money To Buy Chips to Play Roulette, then cash out your winnings with the house when you're done. Crypto Investors Use Stablecoins to Buy and Sell Fai More volatile Cryptocurrencies. Using Stablecoins for these Purchases Can Have Lower Transaction Or Converson Fees Than Using Cash.

Most Crypto Investors Use Stablecoins As a Pool of Relativel Stable, Liquid Assets More Easily Available for Crypto Investing. But the Holy Grail of Stablecoin Promoters is uses them for payments. Boossers Want Stablecoins To Replace Your Debit or Credit Card AS A Tool for Buying Ordinary Goods and Services, Claiming BlockchaChacha Technology Will Make That Wole Process Faster and Cheaper. In Some Countries With Highly Volatile Currency and Clunky Payment Systems, Some People Use StableCoins for Cross-Border Transactions. But in the United States, it is far easier to use your card; The Idea We would convert our Paychecks to Stablecoins to Buy Groceries is a bit laughable.

Which Means the Only Practical Use For Stablecoins Is Gambling on Crypto. But there's Truly Nothing New Under The Sun. Stablecoins Resemble Two Existing Financial Products – Bank Deposits and Money Market Mutual Funds. Banks Hold Your Money, Keep Records of Your Account Transactions, and Give You Your Money On Demand, Which Theoretically Stablecoin Issuers Also do. And Money Market Mutual Funds are used as a Slush Fund for Other Investments, like Stablecoins are for Crypto Specular.

But Both Bank Accounts and Money Market Mutual Funds Operated Under Robust Regulations, for Good Reasons. The History of Banking Includes Bank Runs and Failures, Including in Recent Years – Even With Safety and Soundness Regulations and Deposit Insurance. And runs on money market mutual fundes Helped amplify the 2008 Financial Crisis. Investors Had Lots of Money Parked in What They Assumed Were Safe Accounts. But, When Big Firms Like Lehman Brothers Failed, Investors Rushed to Cash Out, Fueling the Stock Market Meltdown That Reverberated Throughout The Financial System.

Stablecoins Have Already Exhibited These Same Problems That Have Left Investors in the Lurcha Without Any Guardrails. Stablecoins frequently Become UNHOOKED FROM PREGGED VALUE AND MYY OF THEM LACK RELIABLE RESERVES SO that People Can Get Their Money Out Promptly. In fact, A Study By International Economist that Looke at 60 Different StableCoins Found That they all Had Lost Their Peg at Least Once. Meaning they are Anything But Stable.

Terraform Lab's Terra/Luna Stablecoin, An Esoteric Algorithmic Stablecoin Backed by Little More Than Fancy Computer Code, Was Toured by Crypto Bros As a Revolution in Finance and was a Darling of Crypto Venture Capitalists. But it was a fraudulent house of cards. When earth's delicate Algorithm Began to Melt Down, Investors Bailed and Terra Collape, Triggering The 2022 Crypto Crash. The Episode Revealed That Big Crypto is Just Like Big Wall Street, WHERE A Handful of Deedlies Interwined Firms Can Rapidly Spread Financial Contagion. When One Collape, The Others Soon Followed.

Tether is the number one issuer of stablecoins, and it is seen as a kind of central bank of crypto that props up global crypto trading. But Tether has almedady settled with the New York Attorney General and the Commodity Futures Trading Commission to Resolve Claims It Misled Investors About Where it Had Wary Reserve to Cover Its Coins, and Failed To Complete Audits of Its Reserve Assets. It's Also Incaseingly The Stablecoin of Choice for Money Launderers.

Even Circle, consider to Moreus Serious us-based Stablecoin Issuer, Became Unhitched From Its Price Peg in 2023 When the Crypto Friendly Silicon Valley Bank (SVB) Collape. $ 3.3 Billion of Circle's Allegedly Safe Reserves Were Held in UndiSured Deposit At Svb. Had Federal Regulars Not Quickly Stepd in and Spent Billions to Keep Circle and Svb Storers who, The Entire Crypto Industry Could Have Imploded.

Right Now, These Stablecoins Have Almost No Federal Oversight Even Though They Behave Like Some Pretty Ordinary and Regulated Financial Products. I know, ENACTING SOME REGULATIONS FOR THEAD SKETCHY THNS SOUNDS Good, RIGHT? Not so fast.

The Senate proposal has Been Largely Crafted by Industry and would Essentially Allew Stablecoin Issuers to have their cake and eat it too. It would give stablecoins many of the privages Associated with Banking, but fever of the Same Responsibility. For Example, The Bill would Not Require Stablecoin Issuers to Get Private Deposit Insurance or Have Truly Stable and Robust Reverves. Regulars would have Little Edibility to Look Under The Hood, and Stablecoin Issuers Could Seek Out States With Light-Touch Regulatory Regimes to approve Their Coins.

But the Bill's Greatest Risk Is That It would Allew Big Tech Platforms Like Amazon, Meta, or X to Become Stablecoin Issuers. Congress Has Long Prohibited Non-Financial Firms from Becoming Banks Because the Combination of Commerce and Banking is a Recipe for Disaster. Company-Owned Banks Have Incentives to make Imprudent Investments in Their Affiliates, and If the Affiliate Stumbles, The Bank Can Go Down with it. But This Bill Ignoores That Firewall Almost Entirely.

A Big Tech-Sisted StableCoin would be Company Scrip for the 21^st Century. An Amazon With Bezos Bucks would not Only the Dominant Retailer of Goods, but also a de facto bank, issuing its Own Currency and Holding Deposits for Millions of Customers. It Council Control Access, Surveil Transactions, manipulated The Pricing of Goods, and the Price of Its Bespoke Money. OR, if x Printed Musk Bucks, it couus cut off access on a political whim. And If Either Company Went Under Two to Aqua Chain Crisis or Bad Management, The Collapse Could Wipe Out People's Stablecoin Accounts and Crater the Real Economy.

In 2019, when Meta (then Facebook) Proposed its Own Libra Stablecoin, There was Bipartisan Opposition that lastly Tanked The Idea. TODAY, Stablecoin Backers includes Both Republicans and Democrats Like Senator Gillibrand. What's Changed is That The Crypto Industry Has Poured a Gusher of Money Onto a Now Sycophantic Congress. They have instilled Crypto Hucksters in the White House and in Federal Financial Agencies.

TRUMP HAS Embraced the Industry, Saying the Us Will Be The Crypto Capital of the World and Creating His Own Crypto Meme Coin, While His Family Operates Their Own Crypto Exchange. This week, He Called on Congress to Pass Stablecoin Legislation During a Taped Address To A Crypto Trade Group Summit.

Now the Cryptocrats Have Their Best Chance to Enshrine Their Anti-government and Self-Interested Ideas IntoRal Law. This is all part and parcel of Elon Musk and his so-heer department of government efficiency's Assault on the Federal Government, Including Trying to Distribule The Consumer Financial Protection Bureau and Defang Banking Regulars (Just As Musk Launches His Own Financial Services Platform).

And Crypto Ceos Are Demanding Congress Pass An Industry-Friendly Stablecoin Bill to Demonstrate Their Fealty, but also to pave the way for Much Worse Crypto Craziness to how. Stablecoins Are Really Only Good for Gambling in Crypto Markets, and this Bill is the lynchpin to exposure the Entire Financial System to the Crypto Casino. The Crypto Bros Are High Fiving Over Soaring Crypto Prices Now, But Once The Banks and Financial Firms Are Exposed to Not Only the Booms But Also The Busts, The Real Economy Will Be Put At Greater Risk.

In 2022, The Crypto Industry Lost Over $ 2 Trillion in Value. But Your Bank probably didn't GO Under Because It Wasn'T up to Its Neck in Crypto. But This Stablecoin Bill – And Likely Worse Bills to Follow – Could Change That, If We're All Suddenly Expose to the Risk, Fraud, and Instability This Industry Represents.