Adam Levitin on the GENIUS Act: “[I]n regard to cash deposits, the stablecoin investors will have priority over the claims of ma-and-pa for their bank deposits (and thus over the FDIC's subrogation claim when it pays ma-and-pa). Yes, you read that correctly: Congress is about to put the claims of stablecoin investors ahead of ma and pa's bank deposits. That's just stunning. Now ma-and-pa's deposits are FDIC insured, so they'll be alright, but it means the FDIC's Deposit Insurance Fund is footing the bill. In other words, the GENIUS Act is subsidizing stablecoin issuance on the back of bank deposits. By subordinating the FDIC's subrogation claim in a bank insolvency to the claims of stablecoin investors, the GENIUS Act is effectively letting FDIC insurance leak out to cover uninsured stablecoins, without any insurance premiums paid.”
@molly0xfff Jesus H Christ, why is America cooking itself?
a HOT Rubie @molly0xfff (not for Molly) In other words, FREE MONEY FOR FREE!!!
@molly0xfff you can pry my right to insure someone else’s Ponzi scheme from my cold, broke hands
@molly0xfff I guess that means that https://www.web3isgoinggreat.com/ will be less entertaining for non-"investors" in the future?
@molly0xfff
They're making a hole in the economy and they're going to pull all the money out from behind a legal wall.
No American bank account will be safe.
@molly0xfff is this not just the savings and loan disaster all over again?
@molly0xfff
In the 1980's savings and loans collapsed because regulation was reduced. Since the FSLIC was insuring the investors, owners could be really risky with investments. Also, the amount of savings covered went up from 40k to 100k. Insurance rates weren't really raised high enough to pay for it all.
If the corporate investors were actually on the hook to lose money, they'd be more conservative in their investments. 'Too big to fail', they never really have to think long term.
@molly0xfff would be a shame if everyone who has a little money in the bank went to withdraw it now...
@molly0xfff At least we know where the next financial crisis is coming from. Or maybe the one after the next one.
@molly0xfff Job Opportunity: Associate HR
Location: Remote
LINK ON MY BIO TO APPLY
