Stablecoins: Financial Innovation or a Digital Makeover of 19th-Century Financial ‘Pipes’?

Stablecoins: ‘Narrow Banks’ in Blockchain Clothing

The 2023 collapse of Silicon Valley Bank (SVB) laid bare a timeless banking flaw: maturity mismatch. Depositors can withdraw funds on demand, but banks tie up that money in long-term investments. When interest rates spike and trust erodes, a bank run ensues, forcing fire sales of assets—and governments to bail out the system.

The concept of a ‘narrow bank’ emerged post-Great Depression in the 1930s: institutions that only accept deposits and park them entirely in ultra-safe, liquid assets like cash or short-term Treasuries. While risk-free, they’re financial zombies—no lending, no credit creation, no economic growth.

Stablecoins are the tech-era reboot of narrow banks: private digital tokens pegged to the dollar, claiming ‘1:1 backing by liquid reserves’. Tether and USDC tout ‘programmable, borderless, tamper-proof’ deposits, minus regulatory red tape.

But beneath the digital glitter lies finance’s age-old Achilles’ heel: trust. Reserves are often opaque, custodians offshore, audits selective, and redemption just a promise. The 2022 TerraUSD crash showed why: it used algorithms (not real reserves) to stay pegged, relying on another token, Luna. When confidence faded, investors dumped Luna to redeem TerraUSD. With no solid collateral, both tokens collapsed in days. Even ‘fully backed’ stablecoins today wobble when reserve credibility is questioned.

The Genius Act: Extending the Dollar’s ‘Exorbitant Privilege’

The U.S. Genius Act aims to驯服 stablecoins by:
– Defining ‘payment stablecoins’: Banning interest (to prioritize utility over speculation) and mandating full backing with cash or Treasuries;
– Regulatory clampdown: Requiring licensed, U.S.-registered issuers; foreign players must comply or exit;
– Consumer safeguards: Prioritizing redemption in bankruptcy and monthly reserve disclosures.

The upside is clear: No fancy algorithms, unregulated wildcards, or mixing speculation with payments. But clarity ≠ safety. By legally classifying stablecoins as narrow banks, the Act kills maturity mismatch but also bypasses finance’s engine—turning savings into investment—and turns risk-averse funds into idle cash.

Loopholes remain: Issuers with <$100B in assets can opt for state oversight, inviting regulatory arbitrage. A crisis could trigger mass Treasury sell-offs to redeem stablecoins, destabilizing the ‘safe haven’ market they’re supposed to rely on.

Stablecoins: Old Risks in New Wrapper

Advocates hype geopolitical wins: Pegging stablecoins to dollar reserves (e.g., Treasuries) could make them the default for global payments, extending the dollar’s dominance into the internet age—a ‘Bretton Woods meets Silicon Valley’ power play.

But economists warn: Anchoring stablecoins to Treasuries just shifts systemic risk to a politically popular but untested corner. Worse, blockchain’s original vision—ending trust dependence—is betrayed; instead, we’re doubling down on federal manerage.

Money remains a social contract: A promise someone, somewhere will cover losses. No code or collateral can eliminate the need for credibility. And Financial’s cardinal trade-off endures: Safety comes at the cost of efficiency. Forget this, and the next crisis looms.

Stablecoins aren’t innovation—they’re old risks repackaged. The danger isn’t what they are, but what we pretend they aren’t.

Read More《华尔街日报:稳定币是创新，还是19世纪金融“管道”的现代翻版?》

This content is AI-generated and does not constitute investment advice. Please exercise your own rational judgment.

链上探索《华尔街日报:稳定币是创新，还是19世纪金融“管道”的现代翻版?》

• Startup Commentary”In the 19.9-yuan roast duck, there lies Chinese magic that the West can’t learn.”
• Startup Commentary”36Kr Going Global·Middle East | Invest Qatar’s China Visit: Gathering Top Resources for a Collaborative Future”
• Chain Exploration”PUMP Rises Against the Trend, and the Meme Launchpad Has Seen Continuous Battles in the Past Two Weeks”
• Startup Commentary”Documenting Farewells Behind the Shutter: I Became a Divorce Photographer”
• Startup Commentary”Hema Closes Membership Stores and Begins to Face New Rivals”