Lawrence Summers, the former US Treasury secretary, has said that stablecoins will not increase net demand for US debt in the first half of 2025, because the large amount of money that may flow into the market is already allocated to US debt, and he does not believe that stablecoins can substantially reduce the burden of fiscal deficits. He is skeptical that stablecoins will significantly help finance budget deficits. There are two things that must be done to regulate stablecoins: one is to prevent bank runs under multiple equilibria, and the other is not to allow anonymous transactions. The raison d'être of stablecoins should be that they facilitate payments and transactions, not because they can help governments finance debt more easily.
In addition, Mr. Summers adds, over time Mr. Trump will realise what every US president has learnt: "Fed bashing is a very risky game."
Former US Treasury Secretary: Stablecoins will not increase net demand for US debt
2025-09-13 03:07:56
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