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The WSJ considers whether stablecoins, as "private money," need to follow the same regulatory path as banks. As Faryar points out, this framing misses the structural point-- 90% of M2 is already privately issued. The right question is whether regulation matches the risk. For stablecoins: no lending, no leverage, no fractional reserve. 1:1 cash and Treasuries by statute. GENIUS got that calibration right. CLARITY will do the same for broader market structure and for growing U.S.-regulated payment stablecoins.
Faryar Shirzad 🛡️
A piece from @greg_ip in @WSJ today asks whether stablecoins are a risk to the economy because they are "private money." It's a fair question, but the framing skips over how the US monetary system has actually worked for 160 years.
"Private money" isn't the exception in our system — it's the rule. Roughly 90% of M2 is privately issued: commercial bank deposits and money market fund shares. Each carries different risks and is regulated commensurately — banks by Basel, capital, FDIC, and stress testing; MMFs by SEC liquidity rules; and now GENIUS stablecoins by a purpose-built federal regime.
The right question isn't "public or private." It's whether the regulation matches the risk. GENIUS does.
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