Bob Murphy

If you had stable coins that could pay interest, that would put conventional banks out of business, right?

Because again, why would you keep your money parked with a regular bank that's closed on weekends and whatever when you could have blockchain-based finance that's available 24-7 and pays a higher return

Why wouldn't you do that?

So everybody would shift over in the stable.

So I think that was the main reason the Genius Act explicitly forbid paying of interest directly to stablecoin holders.

But then now what's going on, and you see Brian Moynihan, the CEO of Bank of America recently, was warning about this, saying, if Congress doesn't close these loopholes, you're going to see $6 trillion leave the conventional banking sector.

And so there what they're referring to is, even though the Genius Act explicitly forbid it,

there's still workarounds, right?

Like you could still, you know, like Coinbase or whoever could say, oh, if you park your stable coins with us, we'll give you all of these incentives and rewards.

So even though the issuer of the stable coin or Circle, whoever, isn't directly paying it to you, still, you know, by going that route, you're getting it.

So that's now what

is in flux and they're arguing about, and they're trying to reach a compromise where, well, maybe if you stake it, so you don't have access to your money, then you can get paid.

But if you have, so that's kind of the way it's evolving.

And all this stuff is very interesting because this really is like an example of,

what's called free banking, right?

Like the idea of just pure banking in the sense of just financial intermediaries and people giving their money to one group, getting a token that's a claim on that, and then people accepting it.

And should it be backed 100% or not?

These are all issues that, you know, were sort of like libertarian science fiction.

And now it's, you know, it's reality.

So my colleague at the Mises Institute, Alex Pollack, he's written extensively on this.