No Result
View All Result
SUBMIT YOUR ARTICLES
  • Login
Friday, October 31, 2025
TheAdviserMagazine.com
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
No Result
View All Result
TheAdviserMagazine.com
No Result
View All Result
Home Market Research Cryptocurrency

Nobel prize-winning economist says ‘stablecoins don’t serve any clearly useful function ’; Coinmetrics co-founder disagrees

by TheAdviserMagazine
5 months ago
in Cryptocurrency
Reading Time: 3 mins read
A A
Nobel prize-winning economist says ‘stablecoins don’t serve any clearly useful function ’; Coinmetrics co-founder disagrees
Share on FacebookShare on TwitterShare on LInkedIn



American economist Paul Krugman, who won the Nobel Prize in 2008, believes that stablecoins do not have any practical utility. In a May 30 blog post entitled ‘Digital Corruption Takes Over DC,’ Krugman opined that “stablecoins don’t serve any clearly useful function,” adding:

“They [stablecoins] 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.”

Therefore, Krugman questioned why anyone would not just use U.S. dollars instead of using tokens that are “supposedly backed by dollars.”

According to Krugman, stablecoins offer one feature that traditional modes of payment do not: anonymity. The anonymity associated with stablecoin deposits is a “valuable feature” for miscreants looking to commit crimes, from money laundering and extortion to the purchase of illegal drugs, he wrote, adding:

“In other words, the only economic reason for stablecoins is to facilitate criminal activity.”

Krugman calls stablecoin issuers ‘teched-up versions of antebellum banks’

In 1861, the U.S. federal government printed paper currency for the first time to fund the Civil War. Prior to that, gold and silver were the only official forms of money.

Before the federal government started printing paper currency, several private and unregulated banks, called antebellum banks, issued their own paper notes to ease daily transactions. Users could exchange these antebellum bank notes for gold or silver at any time. However, according to Krugman, most of these antebellum banks were “wildcat banks” that were set up with the sole purpose of defrauding users, leading to devastating bank runs in the 1930s.

According to Krugman, stablecoins are the modern-day version of antebellum notes, with the only difference being that these currencies served a purpose: filling the role of currency issuers in the absence of federal notes. Therefore, Krugman likens stablecoin issuers to the antebellum banks of the 19th century. He wrote:

“So, like antebellum bank notes, which were privately issued currencies supported by the claim that they were backed by gold and silver, stablecoins are privately issued tokens supported by the claim that they are backed by dollars.”

He went on to write that just as the 2008 financial crisis was triggered by ‘shadow banks’ that “evaded precautionary regulation,” stablecoins are “a new kind of shadow bank.”

Krugman says GENIUS Act backers have a vested interest

Krugman opined that lawmakers who are backing the U.S. stablecoin bill, dubbed the GENIUS Act, have a vested interest in passing the legislation. According to him, some of these lawmakers are “probably” aware of how stablecoins can facilitate crime. However, he added:

“…it’s difficult to get someone to understand something when their campaign contributions and, in some cases, their personal wealth depends on their not understanding it.”

Stablecoin issuers have repeatedly tried to assure users that their tokens are largely backed by U.S. Treasury bills. However, Krugman explained that the practice poses a significant risk to the U.S. economy.

This is because, like a bank run, if there is a rush of users trying to redeem their stablecoins for U.S. dollars at the same time, it would force issuers into a “fire sale” of treasury bills. This, in turn, would raise interest rates and turn into a “run on government debt,” threatening the financial stability of the entire economy. He noted:

“The fundamental point is that the growth and legitimation of stablecoins poses new risks to overall financial stability — all in the name of making it easier for criminals to do their business.”

He concluded that the consideration of the GENIUS Act indicates that Washington, DC, has turned into a town that “if not entirely controlled by the digital Mob, has at least been largely bought and paid for.”

Coin Metrics co-founder calls Krugman ‘misinformed’

Nic Carter, co-founder of blockchain data aggregator Coin Metrics and general partner at Castle Island Ventures, a crypto and blockchain-focused venture capital firm, believes Krugman’s view on stablecoins is wrong. In a post on X on Sunday, he wrote:

“for a “nobel” winning economist he [Krugman] is remarkably misinformed about the subject matter.”

Carter noted that the more than 100 million people who use stablecoins would “beg to differ” from Krugman’s claim that stablecoins do not have any utility.

Carter was not alone in criticizing Krugman’s claims. Responding to Carter’s post, Paul “Teddy” Fusaro, president of crypto asset manager Bitwise Asset Management, noted that calling Krugman “remarkably misinformed” is “remarkably generous” on Carter’s part.

Mentioned in this article

Latest Alpha Market Report



Source link

Tags: cofounderCoinmetricsdisagreesDonteconomistfunctionNobelPrizeWinningserveStablecoins
ShareTweetShare
Previous Post

7 Payouts You Can Still Get From Old Lawsuits and Settlements

Next Post

Dow futures dip as Wall Street weighs likelihood of Trump’s latest tariff threat, while U.S. eyes call to resolve China trade snag

Related Posts

edit post
Strategy’s US.8 B Profit Proves the Bitcoin Narrative & Pushes Best Altcoins like $HYPER to Soar

Strategy’s US$2.8 B Profit Proves the Bitcoin Narrative & Pushes Best Altcoins like $HYPER to Soar

by TheAdviserMagazine
October 31, 2025
0

Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure What to Know: 1️⃣ Strategy (formerly MicroStrategy)...

edit post
Will Crypto Market Rebound or Crash as 10X Research Tips Shorting Ethereum?

Will Crypto Market Rebound or Crash as 10X Research Tips Shorting Ethereum?

by TheAdviserMagazine
October 31, 2025
0

Bitcoin, Ethereum, XRP, and other altcoins tumbled amid the latest crypto market crash. Over $1.2 billion in long positions were...

edit post
XRP Could Drive the ‘Biggest Economic Shift’ in Decades: Crypto Expert

XRP Could Drive the ‘Biggest Economic Shift’ in Decades: Crypto Expert

by TheAdviserMagazine
October 30, 2025
0

Vincent Scott, a well-known voice in the XRP community, urged patience while restating a big claim: he called XRP and...

edit post
Has Mastercard accepted the inevitability of crypto? Spends B on tokenization platform

Has Mastercard accepted the inevitability of crypto? Spends $2B on tokenization platform

by TheAdviserMagazine
October 30, 2025
0

Mastercard may soon make a significant investment to fully enter the crypto space.According to Reuters, the company is in advanced...

edit post
Ava Labs Transfers BTC.b Infrastructure to Lombard for Multi-Chain Use

Ava Labs Transfers BTC.b Infrastructure to Lombard for Multi-Chain Use

by TheAdviserMagazine
October 30, 2025
0

According to the teams, Ava Labs has transferred the infrastructure supporting BTC.b, the bitcoin-backed token on the Avalanche blockchain, to...

edit post
Crypto IPO Boom Fades: Only Circle and Galaxy Digital Show Profits, as eToro Drops 40%

Crypto IPO Boom Fades: Only Circle and Galaxy Digital Show Profits, as eToro Drops 40%

by TheAdviserMagazine
October 30, 2025
0

Investor excitement around cryptocurrency IPOs in 2025 has faced some harsh market realities. Despite a wave of public listings from...

Next Post
edit post
Dow futures dip as Wall Street weighs likelihood of Trump’s latest tariff threat, while U.S. eyes call to resolve China trade snag

Dow futures dip as Wall Street weighs likelihood of Trump’s latest tariff threat, while U.S. eyes call to resolve China trade snag

edit post
Asian stocks: Asian stocks drop, gold rises in risk-off start to week

Asian stocks: Asian stocks drop, gold rises in risk-off start to week

  • Trending
  • Comments
  • Latest
edit post
77-year-old popular furniture retailer closes store locations

77-year-old popular furniture retailer closes store locations

October 18, 2025
edit post
Pennsylvania House of Representatives Rejects Update to Child Custody Laws

Pennsylvania House of Representatives Rejects Update to Child Custody Laws

October 7, 2025
edit post
What to Do When a Loved One Dies in North Carolina

What to Do When a Loved One Dies in North Carolina

October 8, 2025
edit post
Another Violent Outburst – Democrats Inciting Civil Unrest

Another Violent Outburst – Democrats Inciting Civil Unrest

October 24, 2025
edit post
Probate vs. Non-Probate Assets: What’s the Difference?

Probate vs. Non-Probate Assets: What’s the Difference?

October 17, 2025
edit post
California Attorney Pleads Guilty For Role In 2M Ponzi Scheme

California Attorney Pleads Guilty For Role In $912M Ponzi Scheme

October 15, 2025
edit post
Afraid to Buy Your First Rental? Here’s How to Finally Start (Rookie Reply)

Afraid to Buy Your First Rental? Here’s How to Finally Start (Rookie Reply)

0
edit post
Links 10/31/2025 | naked capitalism

Links 10/31/2025 | naked capitalism

0
edit post
29 truck carrier files Chapter 11

29 truck carrier files Chapter 11

0
edit post
Strategy’s US.8 B Profit Proves the Bitcoin Narrative & Pushes Best Altcoins like $HYPER to Soar

Strategy’s US$2.8 B Profit Proves the Bitcoin Narrative & Pushes Best Altcoins like $HYPER to Soar

0
edit post
How Much Vacation Time Are American Workers Actually Taking?

How Much Vacation Time Are American Workers Actually Taking?

0
edit post
Medpace Holdings – MEDP: Kapitalrendite besser als bei Iqvia, Thermo Fisher & Icon!

Medpace Holdings – MEDP: Kapitalrendite besser als bei Iqvia, Thermo Fisher & Icon!

0
edit post
How Much Vacation Time Are American Workers Actually Taking?

How Much Vacation Time Are American Workers Actually Taking?

October 31, 2025
edit post
Strategy’s US.8 B Profit Proves the Bitcoin Narrative & Pushes Best Altcoins like $HYPER to Soar

Strategy’s US$2.8 B Profit Proves the Bitcoin Narrative & Pushes Best Altcoins like $HYPER to Soar

October 31, 2025
edit post
Cambridge’s PACT raises €17.2M to scale its collagen-based alternative to plastic textiles

Cambridge’s PACT raises €17.2M to scale its collagen-based alternative to plastic textiles

October 31, 2025
edit post
Afraid to Buy Your First Rental? Here’s How to Finally Start (Rookie Reply)

Afraid to Buy Your First Rental? Here’s How to Finally Start (Rookie Reply)

October 31, 2025
edit post
How a Personal Finance Expert Leverages Holiday Sales for Household Necessities

How a Personal Finance Expert Leverages Holiday Sales for Household Necessities

October 31, 2025
edit post
Links 10/31/2025 | naked capitalism

Links 10/31/2025 | naked capitalism

October 31, 2025
The Adviser Magazine

The first and only national digital and print magazine that connects individuals, families, and businesses to Fee-Only financial advisers, accountants, attorneys and college guidance counselors.

CATEGORIES

  • 401k Plans
  • Business
  • College
  • Cryptocurrency
  • Economy
  • Estate Plans
  • Financial Planning
  • Investing
  • IRS & Taxes
  • Legal
  • Market Analysis
  • Markets
  • Medicare
  • Money
  • Personal Finance
  • Social Security
  • Startups
  • Stock Market
  • Trading

LATEST UPDATES

  • How Much Vacation Time Are American Workers Actually Taking?
  • Strategy’s US$2.8 B Profit Proves the Bitcoin Narrative & Pushes Best Altcoins like $HYPER to Soar
  • Cambridge’s PACT raises €17.2M to scale its collagen-based alternative to plastic textiles
  • Our Great Privacy Policy
  • Terms of Use, Legal Notices & Disclosures
  • Contact us
  • About Us

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.