stablecoins

true?

"every dollar that moves from banking into stablecoins net reduces the money supply (because the money banks “create” is more than the money created by stablecoin issuance), which was previously a Fed-only operation. Stablecoins also weaken the Fed’s power in implementing monetary policy via the fractional reserve banking system. That said, the benefits of stablecoins globally are indisputable: they spread dollar dominance, strengthen the USD reserve currency narrative, make cross-border payments more efficient, and immensely help people outside of the US that need access to a stable currency."

Bridget

true?

"every dollar that moves from banking into stablecoins net reduces the money supply (because the money banks “create” is more than the money created by stablecoin issuance), which was previously a Fed-only operation. Stablecoins also weaken the Fed’s power in implementing monetary policy via the fractional reserve banking system. That said, the benefits of stablecoins globally are indisputable: they spread dollar dominance, strengthen the USD reserve currency narrative, make cross-border payments more efficient, and immensely help people outside of the US that need access to a stable currency."

https://x.com/bridge__harris/status/1904935626874773944

andyjagoe.com // denim.vc // tokenizing real-world assets / onchain venture funds @fairmint

one idea to reduce existential risk of stables on credit is for stable issuers to hold some reserves as bank deposits

M2 doesn't decrease and banks can still make loans

banks replace many small depositors with a few big depositors & lose pricing power on interest rates paid