Macro Musings with David Beckworth Manmohan Singh on the Meaning of Money after the GENIUS Act
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Oct 13, 2025 In this discussion, Manmohan Singh, a former IMF official and expert in financial markets, explores whether money still matters in today's economy. He examines the implications of the GENIUS Act on stablecoins and their regulation, revealing how it could reshape the financial landscape. Singh delves into the role of stablecoins in the Eurodollar market, shares insights on collateral shortages, and debates the future of banks versus fintechs. He also discusses how stablecoins might challenge central banks' control over money and the potential impacts on emerging markets.
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Moneyness Is A Spectrum
- Moneyness is a spectrum rather than a binary quality and depends on collateral services.
- Changes in how collateral is handled can increase or decrease an asset's moneyness.
QE Can Remove Valuable Collateral
- QE can lower rates but also removes collateral, reducing transaction assets and plumbing velocity.
- The collateral effect can partly offset QE's intended stimulus on the economy.
Geopolitics Can Reorder Collateral Hierarchy
- Global collateral markets vary regionally and geopolitics shape demand for safe assets like U.S. Treasuries.
- If new large issuers (e.g., Chinese govies) join top clearinghouses, the global collateral hierarchy could shift.
