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Another Dumbest Day In History: Senate Approves Cryptocurrency Bill [1]

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Date: 2025-06-17

I still remember in the waning days of the Bill Clinton presidency standing in line at a store and reading a newspaper (this was before the internet) how Clinton had signed a law repealing the Glass Steagull Act — a 1933 law enacted in response to the Great Depression and which mandated the legal separation between commercial banking and investment banking activities. Here was a common-sense, successful law that contributed majorly to preventing a recurrence of the Depression era banking/finance collapse, and there was no countervailing benefit to repealing it, except for enabling reckless greed. What could go wrong? I remember thinking, “I can’t f’ing believe this!” and sure enough, by 2008, the entire world banking system was on the verge of collapse due to un-prosecuted, stupid and entirely predictable greed,

Now — today — we have another Dumbest Day in History as the U.S. Senate, with bipartisan Democratic support Passes Massive Cryptocurrency Bill, Ignoring Risk To Financial System:

The Senate gave its stamp of approval on Wednesday to a massive and growing chunk of the cryptocurrency industry, blessing it with a light-touch regulatory regime that, experts say, may come with a price tag: the stability of the country’s financial system. . . . . This bill passed with 68 votes in support, 30 against. The bill opens the door for a notoriously risky form of cryptocurrency known as stablecoins to enter the rest of the mainstream financial system.

It is hard for a cynic to give this bill a better name: the Genius Act. See The Genius Act Will Bring Economic Chaos (“This proposal bears an uncanny resemblance to the way America’s monetary system functioned from the mid-1830s until the Civil War, a period known as the Free Banking Era.”). Here is what these Geniuses, including notable Democrats, have come up with:

If you buy one dollar worth of stablecoin, the company that issues it may put that dollar in a bank somewhere, or use it to purchase a yield-generating asset like a treasury bond. Riskier stablecoin firms may make other, more exotic decisions about how to keep the coin stable. The result is that stablecoin issuers may end up acting somewhat like banks, investing what stablecoin users think of as deposits in various ways. Problems may arise in the event of a crisis: stablecoin users could attempt to redeem their coins for dollars en masse, causing a run. That could then spark a mass withdrawal of the backing assets, rapidly depressing the treasury market or destabilizing banks that hold the cash that backs various coins. There’s no deposit insurance for stablecoins, or other forms of regulation that apply to banks and keep them stable. This has prompted concern among many experts, including several figures who were in government through the 2008 financial crash.

There is no discernible benefit to allowing banks to resume issuing their own currencies and of varying creditworthiness. In addition to its certain, not probable, destabilizing effect on the entire financial system, you also may be asking yourself: isn't cryptocurrency the new scheme Trump and his family is using to enrich itself ? YES. (“I have never seen such open corruption in any modern government anywhere,” said Steven Levitsky, a professor of government at Harvard University.)

So, what was the Democrats response to this? The Senate voted 68-30 to pass the bill, with 18 Democrats joining the Republicans. I haven’t seen the full vote breakout yet, but NY Democratic Sen. Kirsten Gillibrand led the charge ( as the bill’s first Democrat co-sponsor), joined by Sens. Ruben Gallego (D-AZ), Angela Alsobrooks (D-MD), and Mark Warner (D-VA) as leaders. (Elizabeth Warren led the opposition, and the bill was too far for Chuck Schumer(!), who voted against it.)

This Genius Bill now heads to the House, controlled by Republicans,

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