Trump's GENIUS Act bans stablecoins from paying interest

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The GENIUS Act was supposed to provide "clarity" for stablecoins and crypto in general.

They've now clarified that stablecoins won't be able to pay interest to holders of stablecoins, unlike bank savings accounts and money market funds. David Sacks, Trump's Crypto Tsar explains why in the following interview clip:

https://x.com/Pledditor/status/1936280105451397291

Basically, the banking industry lobbied for this rule, fearing the competition from stablecoins.

Stablecoins are backed by Treasury bills that do pay interest. They now can't share that interest with stablecoin holders - so issuers like Tether and Circle can keep any interest earned for themselves. A nice profit for them. Kerching!

Perhaps the way to profit from this is to buy Circle shares (CRCL) - they had their IPO on June 4th.

Currently, most stablecoins are used for decentralised crypto trading. This new rule will not change that. It might reduce the number of people holding stablecoins as an inflation hedge - if they don't pay interest they are NOT an inflation hedge.


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