A piece from @greg_ip in @WSJ today asks whether stablecoins are a risk to the economy because they are "private money." It's a fair question, but the framing skips over how the US monetary system has actually worked for 160 years.
"Private money" isn't the exception in our system — it's the rule. Roughly 90% of M2 is privately issued: commercial bank deposits and money market fund shares. Each carries different risks and is regulated commensurately — banks by Basel, capital, FDIC, and stress testing; MMFs by SEC liquidity rules; and now GENIUS stablecoins by a purpose-built federal regime.
The right question isn't "public or private." It's whether the regulation matches the risk. GENIUS does. Banks are regulated the way they are because of what banks do: lend, transform maturities, run roughly 10:1 leverage, and create credit. GENIUS issuers cannot do any of those things. By statute, they hold cash and short-dated US Treasuries 1:1 against on-demand claims. No loans. No leverage. No fractional reserve. The free-banking analogy doesn't hold. Pre-1863 notes were backed by speculative state bonds under inconsistent state rules, with no federal floor. GENIUS imposes exactly the floor that era lacked: high-quality liquid assets, segregation, par redemption, monthly attestations, and federal supervision.

The Senate Banking Committee marks up the Market Structure bill next week, and stablecoin rewards remain under debate. Congress already settled this in GENIUS—reopening it now only creates uncertainty and risks the future of the US Dollar as commerce moves onchain. Here’s why Congress should protect the GENIUS Act, and why rewards help consumers without harming community banks. 1/ 🧵 It’s no mystery why big banks want rewards banned. U.S. banks earn $176B/year on the ~$3T they park at the Fed—and another $187B/year from card swipe fees (~$1,440 per household). That’s $360B+ annually from payments and deposits alone (and massive unused lending capacity that the @federalreserve pays the banks to have sit in a drawer somewhere). 2/

The big banks are working overtime to shield themselves from any possibility of competition.

Their latest trick? Objecting to language that they negotiated in the GENIUS Act, in an effort to undermine one of @POTUS’s signature legislative achievements. Remember, GENIUS is a law that is not yet two months old.

Translation: instead of building a better product, they’d rather dig a deeper moat. A 🧵 Banks say there is an “interest loophole” in the GENIUS Act because platforms like @Coinbase can still pay rewards on stablecoins. Rewards are a way platforms compete, an incentive for customers to use their products. Lots of industries give their customers rewards, including the banks who say it's critical for their competitiveness. Here's their own rewards campaign: handsoffmyrewards.com

We're pleased to announce the formation of @coinbase's Global Advisory Council, with @SenToomey, @TimRyan, @JohnAnzo, @chrislehane and @RepSeanMaloney as our first members. Read our latest blog post for details: coinbase.com/blog/coinbase-… The Council will bring together some of the most talented and well-respected leaders to advise @coinbase on the development and growth of our business, and on maintaining our status as the most trusted name in crypto.

1/ Really pleased to see the introduction of the Digital Commodities Consumer Protection Act from @SenStabenow, @JohnBoozman, @CoryBooker, and @SenJohnThune. This bill will ensure the @CFTC has the authority it needs to regulate the digital asset commodity markets. 2/ DCCPA creates a much-needed federal regulatory regime for crypto, which is a big deal. It's a balanced bill that protects consumers, and affirms that top Ds and Rs in Congress understand the importance of digital asset commodity markets and the need for regulatory clarity.

Some reasons for optimism about President Biden’s Executive Order. The White House seems to understand and embrace the transformational potential of digital asset technology, and the importance of maintaining American leadership. Some thoughts: whitehouse.gov/briefing-room/… First, we’re at an inflection point. Digital assets are now widely embraced by millions and there's growing interest in it from officials across government. They’ve become an integral part of the fabric of American life. Today, the White House has confirmed they know this too.

1/ Today, we launched @Coinbase’s Digital Asset Policy Proposal: Safeguarding America’s Financial Leadership (dApp). We’ve consulted with U.S. policymakers, crypto experts, and academics from across the country. You can find the most important points here blog.coinbase.com/digital-asset-… 2/ Our goal is to thoughtfully and respectfully engage in the public conversation about the future of our financial system. That conversation, we believe, requires recognition of two concurrent and broad developments: