Trump’s Stablecoin gamble
Professor Hélène Rey warns that Trump’s crypto crusade isn’t just reckless, it’s potentially catastrophic
In Trump’s Stablecoin Gamble, Project Syndicate, 15 August, London Business School’s Professor Hélène Rey warns that Trump’s crypto crusade isn’t just reckless—it’s potentially catastrophic. By championing the GENIUS Act and other legislation that lets private firms issue dollar-backed stablecoins with minimal oversight, the Trump administration risks igniting a “cyber run” on US currency, where tech vulnerabilities, not economic strength, dictate monetary dominance. Critics like Kenneth Rogoff and Simon Johnson note the echoes of the 1800s free-banking chaos and warn of tax evasion, boom-bust cycles, and widespread financial pain. Meanwhile, Trump’s own crypto empire—over half his fortune—is hardly a secret, though Congress seems blissfully unconcerned.
The administration frames this as a bid to make the US the “crypto capital of the world,” but absent strong safeguards, stablecoins may unleash panics the modern economy isn’t ready for. Economists like Yanis Varoufakis suggest a safer path: a Fed-backed public digital currency harnessing blockchain’s efficiency without the speculative risk. Short-term, Trump’s second term has seen bold wins—from tariff conquests to his Big Beautiful Bill—but long-term, the stakes for US economic stability and global financial order are sky-high. The verdict: Trump’s crypto gamble is flashy, potentially lucrative for insiders, and possibly a disaster waiting to happen.
To read the full article, which is co-authored by Kenneth Rogoff, Simon Johnson and Helene Rey, click here