I am nothing if not “harsh, but fair” so let me steelman GENIUS Act after trashing it last week.
Similar to my criticisms, I’ll hone in on some unremarked benefits.
But first, we have to go back in time to how private currency is regulated in the United States historically.
The Constitution forbade states from issuing their own bills of credit, etc.
But states got around that by issuing state banking charters and letting the banks issue the money. Some cities, like New Orleans, also issued money.
Eventually, the federal government wanted more control and passed a prohibitive tax on state-chart

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Atanmoon78:

What does this mean, what is this?????

PaperImperium

07-31 11:19

Please be wary of impersonators over TG. If we’ve never spoken before, our conversation will likely start from DMs here or an introduction by mutual acquaintances.

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PaperImperium

07-30 20:59

I’m in the Western Union earnings call, and they’re launching a card using their stablecoin.
Instead of picking up your remittance or getting it in an account, it keeps their stablecoin in flight longer, I suppose.
As a reminder, stablecoins are inputs, not finished products. They’re redirecting existing money flows for cost savings, not trying to sell the stablecoin to people.

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PaperImperium

07-29 13:13

Man, down 16% in two days is a heck of a drop. The Korean stock market is needs to tokenize its index, with that kind of volatility.

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PaperImperium

07-28 16:44

Are there any Proof of Reserves servicers that include confirmation that assets aren’t encumbered?
This seems cheap to provide so surely some do this already, and would like to make a list.

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PaperImperium

07-26 17:43

The gold standard has had such an outsized influence in monetary discourse, considering the world was really only in it for 50-60 years (except the UK, which was in it for about a century).
What accounts for this? Silver was the workhorse for metallic currencies for thousands of years, but I’ve never heard of anyone who wants a silver standard.

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PaperImperium

07-26 00:12

GENIUS was a mistake that everyone cheered for when it passed.
I hope CLARITY is not similarly a toxic law dressed up as regulatory relief.

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PaperImperium

07-22 01:34

The biggest problem a GENIUS or other fully reserved stablecoin faces is emissions.
$1 has to be surrendered for every 1 stablecoin created. This is tough.
The two demonstrable profit centers in stablecoins - Tether and historical MakerDAO (not the current Sky, ewww) - did so without full reserves.
The good news is that clever people CAN make a fully reserved stablecoin emit in other ways (although no one seems to have noticed yet, or they simply don’t want to for fear of the Law of Reflux).
The bad news is that emissions is just one part of a successful stablecoin. Circulation and redemption

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PaperImperium

07-21 19:22

The success of USD stablecoins vs non-USD stables is the reaping of seeds sown in the closing days of WWII.
Those in the know will recognize the Triffin Dilemma in the telling of the tale.
As the war came to a close, the US stood alone amongst the major economies. France, UK, USSR, Germany, Japan, China, and most of the world’s middling economies had been badly damaged by the war and the preceding Great Depression.
By 1945, almost the entire world needed rebuilding. That took money, unfortunately, and the Axis, Allied, and Communist Bloc countries had little left. Except the United States, who

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PaperImperium

07-21 03:38

GENIUS really is an imprecisely drafted law. Not amazing for stablecoins, and the next layer of regulatory arbitrage around GENIUS will just make us revisit this topic again.
It’s an awkward middle ground where no one will be happy for very long.

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PaperImperium

07-19 15:10

An underappreciated risk of GENIUS to USDC and similar centralized stablecoins is escheat risk.
In everyday English, this to say the risk from unclaimed property laws, which send abandoned assets to state governments.
Circle is famously loathe to freeze tokens without a lawful order from the government. This is understandable, because that kind of taking and seizure exposes them to litigation risk if the holder surfaces and Circle has no iron-clad justification.
However, USDC was born in 2018, which is plenty of time for tokens to be viewed as abandoned.
Now, unclaimed/abandoned property laws

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PaperImperium

07-19 14:37

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PaperImperium

07-19 02:54

It is a curious fact of history that both the English language and the dollar have enjoyed two periods of being globally dominant.
The English language did so through the consecutive hegemonies of the UK and US.
The dollar did so through the Spanish silver dollar and the US dollar today (the latter - like the yuan, won, yen, most pesos, most dollars - descended directly from the former), with a brief interregnum for the sterling pound.
Both were channeled through the US for round 2, but given the extinction rate of both languages and currencies not descended from a silver coin in 1500s Bohemi

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PaperImperium

07-19 00:35

It never ceases to amaze me how people say they need more yield to use a protocol, and then when that yield appears, they say yield is a red flag.
It’s as if people only want guaranteed yield via subsidies that disappears in a schedule.
Anyway, it does suggest there’s demand for fixed rate lending!

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PaperImperium

07-18 00:00

The Amazon delivery guy has been pretty standoffish ever since he caught me berating the deadbeat tomato plant that lives on my porch - which continues to bloom but made zero fruit - last week.
I wonder if a new delivery driver will be cool or if I’m on the Weirdo House List

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PaperImperium

07-14 12:08

Inflation predictions. Give them to Mr

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PaperImperium

07-07 22:41

I don’t especially like the term “neobank” and want to hear your suggested replacement.
In general, DeFi used to be allergic to uttering the B Word for fear of regulators deciding DeFi needed to be controlled and regulated like the B Word.

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PaperImperium

07-07 19:56

Spite is a powerful force. This probably explains a lot of political views and economic policies.
I personally think it’s unhealthy, but it is what it is.

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PaperImperium

07-06 13:48

You have an opportunity to receive $100. For free. The only condition is that, if you accept, someone else you don’t know will receive $1000 for free.

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