2 posts from May 2025

Forcing Bank Deposits to Subsidize Stablecoins: the GENIUS Act

posted by Adam Levitin

The Senate is set to take up a vote on this Thursday on the GENIUS Act, the legislation to create a regulatory framework for stablecoins. Whatever else one might think about stablecoins or the GENIUS Act, its insolvency provisions are an absolute mess, both conceptually and in drafting. If the GENIUS Act becomes the law, we're in for a FUBAR situation when a stablecoin issuer ends up insolvent. Even more concerning, if a bank custodian for a stablecoin issuer's reserves ends up insolvent, the claims of the stablecoin investors will come ahead of the bank depositors. That's right. Crypto comes ahead of ma-and-pa. 

The effect: stablecoins are being subsidized by bank deposits. Now that's GENIUS.

Continue reading "Forcing Bank Deposits to Subsidize Stablecoins: the GENIUS Act" »

May 7, 2025 at 7:34 PM in Financial Institutions, Pending and New Legislation | Permalink | Comments (0)

Pete Rose and Investment Markets

posted by Adam Levitin

Hopefully readers will indulge me in a bit of a tangent for this post, which is about Pete Rose and his gambling, which often seems to be just another word for investing, particularly when investing in tokens that have no underlying fundamentals.

Rose, the all-time baseball hit leader and one of the most fun players to watch, was famously banned from the Baseball Hall of Fame for gambling on baseball, including on games in which he played or managed. There's now a push to posthumously rehabilitate him, with the President of the United States serving as one of his chief advocates. The President's argument is that Rose didn't do anything so bad because he never bet against his team. 

That's just incorrect. Rose claimed that he never bet against his team. We don't know if he did; he wasn’t the most credible character, given that he initially denied gambling on baseball at all. But let’s assume that he told the truth. Even if Rose never placed a bet directly against his team, he was absolutely betting against them because he wasn't placing one-off bets. He was a serial gambler with repeat relationships with a number of bookies. In that situation, gambling only on the Reds to win on certain days translates into gambling on the Reds to lose on other days.

Continue reading "Pete Rose and Investment Markets" »

May 3, 2025 at 12:29 PM in Sociological Perspectives | Permalink | Comments (0)

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