On Point | Podcast The GENIUS Act and the Wild West of crypto
Jul 11, 2025
Zeke Fox, an investigative reporter for Bloomberg Businessweek and author of 'Number Go Up,' joins Barry Eichengreen, a professor at UC Berkeley, to discuss the GENIUS Act. They delve into how the act could revolutionize banking by allowing banks to issue their cryptocurrencies tied to stable assets. However, they also highlight the potential economic chaos it might unleash, echoing fears of past financial crises. Their conversation navigates the implications for regulation, the rise of stablecoins, and the historical context shaping today's financial landscape.
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Understanding Stablecoins
- A stablecoin is a digital token meant to maintain a stable value, often pegged to a dollar.
- It can be transferred globally with semi-anonymity and instant transactions, unlike traditional bank transfers.
Risks of Multiple Issuers
- The Genius Act could revive a "wild west" era where many institutions issue currencies backed variably.
- This could fracture the uniformity of money, leading to confusion and instability.
Michigan's Banknote Crisis
- In 19th century Michigan, lax state regulation let banks issue notes without proper backing.
- This led to worthless notes causing losses up to 40% of the state's annual income over decades.
