
‘Put up or shut up': Big win in Congress to test crypto's viability
Stablecoins play a modest but critical role in the digital assets world, representing less than 10 percent of the nearly $4 trillion crypto market. While bitcoin, ether and the $TRUMP memecoin, among the thousands of other tokens, are well-known for their extreme price moves, stablecoins like Tether's USDT and Circle's USDC, the two largest with a combined global value of more than $220 billion, are designed so their price keeps steady at $1. That has made them the go-to currency for traders when buying and selling other tokens.
The products — often backed by a mound of cash, U.S. government debt or other safe assets — are sometimes referred to as digital dollars. But proponents say they are a marked upgrade from their fiat counterparts.
For one, they help resolve transactions faster than the middleman-filled payments system of today where purchases need to work their way through a web of different banks and financial institutions. That could provide retailers a new way to avoid the hefty fees they pay whenever a customer uses a credit card. Others point to their ability to seamlessly send money overseas without the delays or expenses that come with, say, a wire transfer.
'Payment stablecoins, when regulated well, when structured well and when compliant, are so much more than a so-called poker chip in a crypto casino,' said Dante Disparte, chief strategy officer and head of global policy and operations for Circle, a leading stablecoin company. 'They're actually innovations that can go places where the brick-and-mortar banking system cannot.'
The stablecoin market has exploded in popularity. There are now about $239 billion worth of the tokens, up from less than $10 billion five years ago, according to a recent report. The federal government's regulatory sign-off on such products could accelerate their growth.
Indeed, executives at major banks like Bank of America, Citigroup and Morgan Stanley said this week they are plotting their moves into the space.
Retailers and other consumer-facing companies are, too. Uber is in a 'study phase' of using stablecoins, CEO Dara Khosrowshahi said last month. Walmart and Amazon are looking into the products, too, according to The Wall Street Journal. And e-commerce company Shopify said it's introducing stablecoin payments on its platform for merchants and consumers.

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The Verge
29 minutes ago
- The Verge
Trump signs first major crypto bill, the GENIUS Act, into law
In a landmark victory for the crypto industry, President Donald Trump signed the GENIUS Act into law, establishing a regulatory framework for a type of digital currency known as stablecoins. The GENIUS Act creates rules for entities that issue stablecoins, whose value is tied to an asset like the US dollar. Those rules govern who's allowed to issue stablecoins, how they need to maintain reserves, what happens in the case of bankruptcy, and an obligation to prevent money laundering. Trump congratulated members of the crypto industry who attended the signing ceremony at the White House, including the CEOs of Coinbase and Tether. He drew a stark contrast between the Biden administration, which he called 'a vicious group of people' who were 'trying to crush your industry,' and himself. 'I got you guys out of so much trouble,' Trump said. 'The entire crypto community, for years, you were mocked and dismissed and counted out,' Trump said. 'But this signing is a massive validation of your hard work and your pioneering spirit.' He added that he chose to back crypto 'at an early stage' because it will make the US dollar stronger. 'And I also did it for the votes,' he said to a round of laughter from the audience, 'because you did come out and vote.' 'This signing is a massive validation of your hard work and your pioneering spirit' The bill passed through both chambers of Congress with bipartisan support, with backers saying it creates necessary safeguards for the industry and keeps the US competitive in the space. But it also saw opposition from other members on both sides. Sen. Josh Hawley (R-MO) criticized the bill as 'a huge giveaway to Big Tech,' citing concerns it would incentivize companies that issue stablecoins to collect more financial data on consumers. In a speech on the Senate floor, Senate Banking Committee Ranking Member Elizabeth Warren (D-MA), said that the bill 'is riddled with loopholes and contains weak safeguards for consumers, national security, and financial stability.' Warren and other Democrats have also warned that legitimizing the stablecoin industry through the legislation could bolster a potential avenue of corruption for Trump. Trump's family is involved in crypto firm World Liberty Financial that launched its own stablecoin, USD1. The White House has said the venture creates no conflicts for the president as his assets are in a trust managed by his kids. 'Through his crypto businesses, President Trump has created an efficient means to trade presidential favors like tariff exemptions, pardons, and government appointments for hundreds of millions—perhaps billions—of dollars from foreign governments, from billionaires, and from large corporations,' Warren said. 'This is the single greatest corruption scandal in American history and, by passing the GENIUS Act, the Senate is about to not only bless this corruption, but to actively facilitate its expansion.' As Trump signed the GENIUS Act, he tried to steer attention to what he's billed as 'a big scandal' for his predecessor. 'This is not an autopen, by the way.' Trump quipped.


Bloomberg
an hour ago
- Bloomberg
'Enormous Victory:' Faulkender on Trump Signs Genius Act
Michael Faulkender, US Treasury Deputy Secretary, discusses President Trump signing the Genius Act into law and how big he thinks the stablecoin market will grow & how that will translate to treasury demand. Faulkender also talks about whether or not the stablecoin will create a financial stability risk and the difference between cutting interest rates in July or waiting to cut in September. Michael Faulkender speaks with Kailey Leinz and Tyler Kendall on the late edition of Bloomberg's "Balance of Power." (Source: Bloomberg)

Los Angeles Times
an hour ago
- Los Angeles Times
Wall Street closes a record-breaking week with a quiet finish
Wall Street closed its third winning week in the last four with a quiet finish on Friday. The S&P 500 edged down by a whisper, less than 0.1%, after setting its all-time high the day before. The Dow Jones Industrial Average fell 142 points, or 0.3%, and the Nasdaq composite edged up by less than 0.1% to add its own record. Norfolk Southern chugged 2.5% higher after an AP source said it's talking with Union Pacific about a merger to create the largest railroad in North America, one that would connect the East and West coasts. Any such deal, though, would likely face tough scrutiny from U.S. regulators. Union Pacific's stock fell 1.2%. The heaviest weight on the market, meanwhile, was Netflix, which fell 5.1% despite reporting a stronger-than-expected profit. Analysts said it wasn't a surprise given the stock had already soared 43% for the year so far coming into the day, six times more than the gain for the S&P 500. American Express likewise delivered a better-than-expected profit report, but its stock lost 2.3%. Analysts pointed to slowing growth in some underlying trends, such as the number of cards it issued. Exxon Mobil sank 3.5% and also tugged on the market. It had been challenging Chevron's $53 billion deal to buy Hess, but an arbitration ruling in Paris about Hess assets off Guyana's coast allowed the buyout to go through. Chevron fell 0.9% after losing an early gain. Stronger-than-expected profit reports for the spring did help several stocks rally. Charles Schwab climbed 2.9%, Regions Financial jumped 6.1% and Comerica added 4.6%. All told, the S&P 500 slipped 0.57 to 6,296.79 points. The Dow Jones Industrial Average dropped 142.30 to 44,342.19, and the Nasdaq composite rose 10.01 to 20,895.66. In the bond market, Treasury yields eased after a report suggested U.S. consumers may be feeling less fearful about coming inflation. They're bracing for inflation of 4.4% in the year ahead, down from last month's projection of 5%, according to preliminary results from a University of Michigan survey. That's important because expectations for high inflation can feed into behaviors that create a vicious cycle that keeps inflation high. Overall sentiment among consumers, meanwhile, was a hair better than economists expected but still well below its historical average. 'Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future,' according to Joanne Hsu, the survey's director. The yield on the 10-year Treasury sank to 4.42% from 4.47% late Thursday. The two-year Treasury yield, which more closely tracks expectations for what the Federal Reserve will do with its short-term rates, also dropped. It fell to 3.87% from 3.91%. A top Fed official, Gov. Chris Waller, said late Thursday that the Fed should cut its overnight interest rate as soon as its next meeting in a couple weeks. That follows sharp criticism from President Donald Trump, who has been castigating the Fed for holding interest rates steady this year instead of cutting them, as it did late last year. Lower rates could give the economy a boost, and Trump has implied they could help the U.S. government save money on its debt payments, though that's uncertain. The interest rates Washington has to pay on its longer-term debt can depend more on what bond investors think than on what the Fed does, and they can even move in opposite directions. The chair of the Fed, meanwhile, has been insisting that he wants to see more data about how Trump's tariffs will affect the economy and inflation before the Fed makes its next move. The downside of lower interest rates is that they can give inflation more fuel, and prices may already be starting to feel the upward effects of tariffs. Traders on Wall Street think it's much more likely that the Fed will resume cutting interest rates in September, rather than later this month, according to data from CME Group. In stock markets abroad, indexes were mixed across Europe and Asia. Hong Kong's Hang Seng jumped 1.3%, but Tokyo's Nikkei 225 slipped 0.2% ahead of an election for the upper house of parliament on Sunday that could wipe out the ruling coalition's upper house majority. Choe writes for the Associated Press.