Andrew Ross Sorkin: prediction

Transcript context

…Now, as you know, through the GENIUS Act, we’re going to run stablecoins through what are, in essence, narrow banks. Good idea, bad idea? Or should we just let them hold all sorts of other assets and be riskier? This is a great question. I do worry that, because the stablecoins are going to require the backing of these Treasury bills, that effectively you’re taking that out of the market, which means less credit to the system ultimately, but the alternative also feels risky. I don’t know. It seems like two choices. It’s not a Hobson’s choice. It’s just a difficult choice. I imagine over time that we will loosen those standards. That’s what I imagine. I imagine this is the first baby step so that people can say these stablecoins are safe, and then over time, we will maybe shift gears slightly. What do you think? I think I agree with that, and it will be necessary. Even with high debt and deficits, there’s only so many T-bills to go around, and we want to use them for everything So, does the rest of the world. You don’t want to get into T-bills paying a rate of zero. The real economy is intrinsically risky for obvious reasons, and financial engineering can only make it so much safer. That’s the ultimate dilemma. It seems to me New Deal banking regulation is finally truly obsolete, and we just don’t know what to replace it with.…

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