**Source:** https://knifefight.substack.com/p/a-simple-guide-to-stablecoins

## Summary

• The GENIUS act (Guiding and Establishing National Innovation for US Stablecoins) became law in July 2025, creating the first major regulatory framework for stablecoins in the U.S., passing with bipartisan support (68-30 in Senate)

• Stablecoins are essentially "low-powered" bank accounts that function like traditional banks but without FDIC insurance, interest payments, or strict KYC/AML requirements, making them accessible to the ~1.4 billion unbanked people globally

• Tether, the largest stablecoin with ~400M users and $163B market cap, has become the 7th largest buyer of U.S. Treasuries and reported $4.9 billion in Q2/2025 profits with only 200 employees

• Stablecoins strengthen dollar dominance by creating new demand for U.S. Treasuries while offering America a way to extend banking services globally with relaxed surveillance requirements

This is the worst part:

• The business model involves collecting customer deposits, investing in Treasuries, and keeping all interest earned—essentially renting U.S. banking services to the global poor

• Long-term predictions include stablecoins replacing traditional bank accounts/payment networks, accelerated dollar dominance, collapse of weaker currencies, and eventual renegotiation of banking surveillance regulations

• Stablecoin networks create winner-takes-all dynamics since transfers within networks are cheap but withdrawals are expensive, encouraging users to join the largest networks

## Key Information

### Extracted Entities

**Keyword:** account, accounts, bank, dollar, dollars, people, stablecoin, stablecoins, traditional, u.s.

**Location:** America, Canada, U.S., US, United Kingdom

**Organization:** Amazon, Federal Reserve, PayPal, Paypal, SWIFT, Senate, Something Interesting, Stablecoins, Treasuries, U.S. Treasuries, US Stablecoins, Ubers

**Person:** Paolo Ardoino

### Referenced Links

- [the trading price for stablecoins tends to hang out just below $1](https://coinmarketcap.com/view/stablecoin/)

-

- [it will greatly increase surveillance](https://x.com/L0laL33tz/status/1902750576422551574)

- [narrow bank](https://en.wikipedia.org/wiki/Narrow_banking)

- [~1.4 billion people still unbanked worldwide](https://www.worldbank.org/en/news/feature/2022/07/21/covid-19-boosted-the-adoption-of-digital-financial-services)

*... and 13 more links*

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*Shared from Contexst on Aug 5, 2025 at 19:55*

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