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What about stablecoins?

Stablecoins are a type of cryptocurrency intended
to have a stable value because they are pegged to
a stable asset, like the dollar. Unlike traditional
cryptocurrencies, like Bitcoin, which can be extremely
volatile, stablecoins minimize price fluctuations,
making them more suitable for transactions and store
of value.
One of the most popular stablecoins is the U.S. Dollar
Coin (USDC), which is pegged to the U.S. dollar. Tether
is another popular stablecoin, which is also pegged to
the U.S. dollar. Both Visa and Mastercard have taken
steps to put in place the technologies and capabilities
needed to allow consumers and businesses to make
and receive stablecoins.

The Guiding and Establishing National Innovation
for U.S. Stablecoins (GENIUS) Act now pending in
Congress aims to create the first comprehensive federal
regulatory framework for stablecoins.

Stablecoins have their detractors. Paul Krugman,
who won the Nobel Prize in 2008 for economics,
asserted that stablecoins do not have any practical
utility. "Retail crypto looks, in particular, a lot like the
'numbers racket,' which siphoned millions of dollars
from generations of working-class Americans, until it
was largely supplanted by state lotteries," he wrote in
a recent blog post.

Krugman likened stablecoins to banknotes issued
before the Civil War and before the United States
started printing currency. At the time, many banks
issued paper currency, which they promised to redeem bluu™ Tab Order is designed to
for gold and silver coins on demand.
help restaurants improve efficiency,
"Unlike antebellum bank notes, however, stablecoins reduce labor costs, and boost
don't serve any clearly useful function," he wrote. customer experience.
"They can't be used to make ordinary purchases, and
there's nothing you can do with them that can't be done
more cheaply and more easily with debit cards, Venmo,
Zelle, wire transfers, etc."

The ownership and distribution of stablecoins, unlike
the ownership and distribution of bank deposits, is
anonymous, Krugman pointed out. "This is a highly
valuable feature for those who want to engage in money
laundering, extortion, purchase of illegal drugs, and so
on," he said. "In other words, the only economic reason
for stablecoins is to facilitate criminal activity."

Patti Murphy is senior editor at Green Sheet and president of
ProScribes Ink, www.proscribes.net. You can also follow her blog,
Today in Payments, at Todayinpayments.com, and her podcast,
Merchant Sales Podcast, co-hosted with James Shepherd at www.
ccsalespro.com/podcast.

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