In a recent essay, former BitMEX CEO Arthur Hayes discusses the role of stablecoins in transforming the U.S. banking system, claiming they could unlock $6.8 trillion in Treasury purchase power.
Stablecoins as a New Solution for Banks
Arthur Hayes argues that the new U.S. Treasury Secretary Scott Bessent plans to transform too-big-to-fail banks into stablecoin machines, allowing them to issue blockchain-based currencies and convert user deposits into Treasuries. He emphasizes that issuing a stablecoin could unlock up to $6.8 trillion in purchasing power for T-bills.
Potential for Increased Bank Market Capitalization
Hayes points out that the deposits held by the largest U.S. banks could be utilized to purchase Treasuries, potentially leading to a significant market cap increase of $3.91 trillion across the eight largest banks. This could result from more efficient asset usage in the current financial system.
Risks and Consequences for the Crypto Industry
Arthur Hayes warns of potential risks for the crypto industry, stating that the privacy of traditional crypto spaces may be jeopardized. He believes stablecoins could become a tool for control and urges investors to focus not on projects like Circle but on more resilient assets like Bitcoin.
Arthur Hayes's essay raises important questions about the future of the banking system and the roles of stablecoins. While they may serve as a government financing tool, there are risks to the decentralized aspects of the crypto industry.
