[mondrian]

The GENIUS act enables tech companies to become reserve holders -- buy US Treasuries with customers' money. Stripe offers a "transactional ecosystem" to the customer in stablecoins, the customer gives USD to Stripe in exchange for stablecoins, Stripe buys short-term Treasuries and makes a shitload of money on interest.

Part of the very high level play is the US Govt seeks to diversify away from depending on nation states for borrowing, and to promote tech companies to the status of reserve holders.

This doesn't add much to the consumer however. I think in fact we are looking at a "fragmented currency" future where you hold like 36 different stablecoins in your wallet because certain platforms accept certain stablecoins. The GENIUS act doesn't offer strict guarantees for getting out of a stablecoin into USD, so I predict dark patterns and "incentives" to make it hard to get out of a stablecoin.

[onesociety2022]

That only makes sense if Stripe issues their own stablecoins? If they let their customers hold USDC on the Tempo chain, then any revenue from holding short-term treasuries goes to Circle. Are you suggesting Stripe would force Circle to share some of their revenue with them or they launch their own stablecoin to compete with USDC?

[mondrian]

Good point. In the scenario I described, I'm assuming Stripe will launch their own stablecoin. I tend to think all major tech companies are incentivized to launch stablecoins and give you discounts and perks when you transact using their stablecoin in their own ecosystem. The more of their stablecoin they issue out, the more money they make on interest.

[sej1]

Stripe already has their own stablecoin: https://www.bridge.xyz/news/usdb

[boringg]

So then by using this product you are de facto buying short term US debt lowering the debt costs in a way? Is that what you are describing? And Stripe makes money on that short term carry.

[asats]

Still doesn't answer why you would need any crypto here. Why can't the USD transferred to stripe just be a record in an SQL database saying customer X has N USD in the account, and transferring that around could be done instantly at zero cost by changing an sql row.

[ENGNR]

There are all sorts of protections around who can be a custodian of someone’s money (for good reason)

However there are use cases like running a marketplace, where the platform would like to be able to direct the flow, maybe hold things temporarily in case there are multiple transactions or to split a transaction up between different clients, before paying it out daily or weekly as a lump sum. Often it’s just to avoid fees, because the marketplace operator charges their fees in a different way (like a flat monthly invoice) and they want to assist with money logic as a service, but not be the custodian of the money.

Even just knowing that money has moved at all can be useful, without any ability to touch it, and it’s difficult to get permissions from conservative financial institutions, whereas permissionless ledgers make it easy.

Crypto can help add that nuance. It’s still your money, but you can give a third party the ability to do some things to assist you, without giving the ability to transfer it all to themself and run away with it.

[grey-area]

So, we're just going to pretend those regulations don't exist for cryptocurrencies too?

[Ekaros]

That sounds like banking or payment processing. Albeit with later Paypal has proven that you do not always need to return funds, but still there is regulatory history on that...

Stable coins are new enough and have not catastrophically crashed yet so there is less oversight.

[DrBrock]

The Terra-Luna stablecoin crash wiped out $50 billion of notional value https://www.sciencedirect.com/science/article/abs/pii/S15446...

It's also a very open secret that the largest Tether stablecoin is not actually 1:1 backed with USD, as they very often claim https://paymentexpert.com/2025/07/24/tether-stablecoin-regul...

[notatoad]

so the short answer to the question of "why crypto" is just to work around regulation, to be able to act as a bank without the regulations that apply to banks?

[mondrian]

Yeah and this is codified in the GENIUS act which passed recently. It enables tech companies to act like banks in certain dimensions, without being regulated like banks.

[notatoad]

ah, okay, i see the part i'm missing here. the GENIUS act doesn't let "tech companies" act like banks, it specifically lets stablecoin issuers act as banks. so this is stripe's play to take advantage of that.

[boringg]

Stable coins are new enough .... and it's in their name... Stable! :)

[mondrian]

Yeah. Stablecoins create demand for Treasuries which drives the price of Treasuries up and interest rate down. So this pressure lowers debt servicing cost for the US government, and Stripe is the holder of those Treasuries and gets paid interest.

This would also serve to counter the drop in global Treasury demand due to recent tariff stuff where presumably our traditional debt holders are losing appetite for US debt...

It also creates a kind of strange situation where stablecoins are basically spendable "Treasury tokens". So you give 1 USD to Uncle Sam (via a middle man like Stripe), get back 1 stablecoin. Then you go and spend the stablecoin, and Uncle Sam goes and spends the USD. It's like a weird double spend situation. Prior to stablecoins, you buy a treasury bill with USD, you hold this unspendable treasury bill while Uncle Sam gets USD to spend.

[boringg]

If the analogy you say is correct -- I think it makes sense in that its stripe that is actually the individual who is holding the treasury (short term debt) and the stablecoin user can spend it on something, and the US treasury can use the debt. At the end of the day stripe is holding the risk.