Bob Murphy

And he was concerned that like the Genius Act by coming out and ostensibly saying that, oh, all the all the U.S.

based stable coin issuers are now have 100 percent reserves.

That is one of the key features.

And that's how the media reported it.

But what they mean in that context is.

is not what that would mean in normal banking.

So normal banking in terms of checking accounts or something, if you put $100 in your checking account, and if the bank said we have 100% reserves, they mean they have the currency in the vault.

But with the Genius Act, the stable coin context to say 100% reserves, it meant they're sitting on T-bills.

And so even though, yeah, T-bills are safer than 30-year mortgages, that's not literally the same thing.

So that's one element that you still could have a run on the stablecoin issuers.

And if they're just sitting on T-bills, they actually couldn't pay people.

So that's one element.

But then the other issue that Alex Pollack raised was that right now, one of the things that could qualify as being fully reserved under the Genius Act is deposits with an FDIC-insured bank.

But you could, so there could be a stable coin issuer that could have a billion dollars in a bank deposit and then say, yeah, we're fully backed up.

But if that bank itself is not 100% reserves, which they're not, then you'd see that issue.

And with Silicon Valley Bank and Circle, you saw that play out in real time where there was a concern until that was resolved that they're gonna be rescued, that people didn't know if you just, if the stable coin issuer has its funds in a conventional bank,

and that bank is susceptible to a run, what are you going to do?

So that's my issue with the stablecoins right now is I'm concerned that by the government coming in and ostensibly making it safe for everybody by insisting 100% reserves, that might lull the public into a false sense of security that actually if there were a run, that the reserves wouldn't be there to back it up.

I do look at those, like truflation and things like that.

So I definitely think that the official government numbers