>All the incentives for stablecoin issuers are to invest at least some of their reserves in riskier assets to get higher returns.
No.
The GENIUS Act requires 100% reserve backing with liquid assets like U.S. dollars or short-term Treasuries and requires issuers to make monthly, public disclosures of the composition of reserves.
The huge, extra large, problem with crypto is that there is no way to prevent a run on the assets. Once people begin to feel that the bottom is falling and start to sell in a panic, and people always do, there is no way to back stop it so in theory it can go to zero. Since we are interwinding wall street and the banks with crypto we will see a collapse similar to what was seen before the fed was put in place. The last source of buying will be the fed and the treasury which will ultimate be the U.S. citizens via government debt and inflation since the government will have to buy assets to support them and the treasury will need to print money which causes inflation. It's going to be ugly. I give it less than 15 yrs maybe even 10 yrs.
Until then, it going to be a wild ride.
robocat•6mo ago
2029 is the year to look forward to: There's going to be a lot of Y2K like fearmongering based on the centenary of the 1929 Wall Street crash that initiated the US great depression.
JohnFen•6mo ago
I tend to agree, although I think most of that is coming even without the added problems of including cryptocurrency in the mix.
That said, I will be keeping an eye on where my money is and pulling it out of anything that is including crypto. Crypto represents a risk pretty far beyond what I have the tolerance for.
l0ng1nu5•6mo ago
No.
The GENIUS Act requires 100% reserve backing with liquid assets like U.S. dollars or short-term Treasuries and requires issuers to make monthly, public disclosures of the composition of reserves.
https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-pr...