Stablecoin Goes Mainstream:
What Could Go Wrong?

Aug 4, 2025

On July 18, President Donald Trump signed into law the GENIUS Act, a major legislative win for Trump, who campaigned on making the U.S. “the crypto capital of the planet.” (The acronym for the Genius Act stands for “Guiding and Establishing National Innovation for U.S. Stablecoin”.)

Joining Trump and the Republicans, the Democrats provided wide support for the bill. In the Senate, the vote on the GENIUS Act was 68–30, with 18 Democrats joining most Republicans in favor. The House approved it with a 308–122 vote with most Republicans and 102 Democrats, including House Minority leader Hakeem Jeffries, voting in favor.

And no wonder. It’s a giant gift to some of the biggest companies, financial speculators … not to speak of drug traffickers and other criminals.

This new law claims to provide a regulatory framework to one kind of cryptocurrency, called stablecoins. Stablecoins are supposed to be a safer and less volatile type of cryptocurrency because companies are supposed to hold the equivalent dollars or gold or euros in reserve to back them up. But up until now, there was no real use of stablecoins in the real world, except by criminals, drug traffickers and scammers, in order to transfer money and access the cash without being detected by regulators or the police.

This is now changing. The U.S. government claims that it will regulate stablecoins, that is, make them safer and more mainstream. This will undoubtedly open up the gates for a giant influx of money from big parts of the supposedly “legitimate” economy into stablecoins. Companies like Amazon or Walmart are already talking about adopting stablecoins as a means of payment and transactions. Big banks, such as JPMorgan Chase and Citigroup, are exploring launching their own stablecoins. Meanwhile, Goldman Sachs and BNY Mellon are partnering to launch their own stablecoins as a basis for new kinds of money-market funds. (Who knows how that will work!)

All these big companies claim that the use of stablecoins potentially saves them a lot of money and makes certain kinds of transactions more efficient.

But nobody should take the assurances of financiers or politicians at face value. First of all, it is almost impossible to know if the companies marketing stablecoins are actually holding the equivalent dollars or gold in reserve. Second, once big companies and financial companies start using stablecoins, it will make it a lot easier for them to do the same thing as the criminal networks: to hide money and transfer lots of money secretly.

Many, many economists have warned that all cryptocurrencies, including stablecoins, are little more than a scam that make a few speculators extremely rich. But they also warn that it has all the makings of a great big economic disaster, that no doubt will result in many more crashes, bank runs, debt crises, as well as taxpayer-funded bailouts of the cryptocurrency sector.

The GENIUS act, stablecoins, cryptocurrencies, bitcoins—they are all merely a sign of the times. Many decades ago, the capitalist class curtailed its investments in production or in useful construction. This has left them swimming in money, with no place to put it except for increasingly more risky and speculative ventures, which pay off much more quickly. Everything can be the subject of speculation and gambling: a fashionable company, a biotechnology laboratory, a master painting, real estate, government debt ... or stablecoins.

Thus, the vast wealth produced by the working class around the world that could be used for the betterment of humanity is blown up and wasted on an epic scale, all because it is under the control of a tiny class of billionaires.