Competition in the stablecoin market is expected to grow, with traditional banks and fintechs entering. Advocates believe stablecoins can boost the US Dollar's status by increasing demand in unstable economies. They may soften government borrowing costs by raising bond demand. However, critics warn that a mismanaged stablecoin could threaten the financial system, leading to collapses and runs, necessitating taxpayer bailouts. Concerns are also raised about potential conflicts of interest involving Trump-affiliated firms profiting from stablecoin transactions.
"You will see many more issuers enter the market and compete. Many of those issuers will be more traditional banks and fintechs."
"You couldn't come up with a better innovation for the greenback on a whiteboard," says Christopher Perkins, president at crypto VC firm CoinFund.
"At bottom, that's what this represents," says Jacob Silverman, coauthor of the book Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud.
The Trump-affiliated firm could earn tens of millions of dollars from the deal, which sparked complaints.
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