David Martin
@drpmartin.bsky.social
Research Associate at @eagletonpoll.bsky.social
Political Science PhD from @rutgersuniversity.bsky.social
Political Science PhD from @rutgersuniversity.bsky.social
TLDR: the Fed's struggles with independence are not new and are intimately tied to financial system instability. Cold War era pressure by the Truman admin on the Fed produced the conditions for the Great Financial Crisis. Attempts to rebuild Fed independence should take this history into account.
November 14, 2025 at 1:32 AM
TLDR: the Fed's struggles with independence are not new and are intimately tied to financial system instability. Cold War era pressure by the Truman admin on the Fed produced the conditions for the Great Financial Crisis. Attempts to rebuild Fed independence should take this history into account.
Similar to bank deposits in the early 20th century, or repos backed by mortgage backed securities in the early 2000s, privately issued money forms backed by private assets are incredibly fragile and can lead to financial crises like the Depression or the GFC.
June 26, 2025 at 8:14 PM
Similar to bank deposits in the early 20th century, or repos backed by mortgage backed securities in the early 2000s, privately issued money forms backed by private assets are incredibly fragile and can lead to financial crises like the Depression or the GFC.
requirements to allow private assets in back of stablecoin issuance. This could come about on its own, or if there is a decline in the availability of public assets (say due to a government surplus). At that point, history is very clear:
June 26, 2025 at 8:14 PM
requirements to allow private assets in back of stablecoin issuance. This could come about on its own, or if there is a decline in the availability of public assets (say due to a government surplus). At that point, history is very clear:
will require a large supply of US treasuries. Second, stablecoins, because they are backed with public assets, will likely be more stable in the short run than some like Eichengreen suggest. However, there will inevitably be pressure to loosen the collateral
June 26, 2025 at 8:14 PM
will require a large supply of US treasuries. Second, stablecoins, because they are backed with public assets, will likely be more stable in the short run than some like Eichengreen suggest. However, there will inevitably be pressure to loosen the collateral
different from other forms of private money (e.g. deposits) that have been grafted onto the state's money system over time. Importantly, this creates another powerful interest in keeping the US government in debt, as stablecoin issuers (just like repo firms before them)
June 26, 2025 at 8:14 PM
different from other forms of private money (e.g. deposits) that have been grafted onto the state's money system over time. Importantly, this creates another powerful interest in keeping the US government in debt, as stablecoin issuers (just like repo firms before them)
This comparison has a few important implications. First, while crypto is often framed as the antithesis of the government-managed fiat money system, the growth of stablecoins suggests that crypto's path to widespread acceptance is no
June 26, 2025 at 8:14 PM
This comparison has a few important implications. First, while crypto is often framed as the antithesis of the government-managed fiat money system, the growth of stablecoins suggests that crypto's path to widespread acceptance is no
Stablecoins are already massive purchasers of US debt. Encouraging the growth of stablecoins is especially important for an administration that deeply desires lower interest rates and a stable treasury market. cointelegraph.com/news/tether-...
Tether surpasses Germany’s $111B of US Treasury holdings
Tether surpassed Germany’s $111 billion worth of US Treasuries, becoming the 19th largest entity among all foreign countries holding T-bills.
cointelegraph.com
June 26, 2025 at 8:14 PM
Stablecoins are already massive purchasers of US debt. Encouraging the growth of stablecoins is especially important for an administration that deeply desires lower interest rates and a stable treasury market. cointelegraph.com/news/tether-...
It's clear that policymakers see the Genius Act in a similar light. Nearly every public statement about the act highlights its role in "reinforcing dollar supremacy"-- (in other words, increasing the demand for US treasuries).
x.com/SecScottBess...
x.com/SecScottBess...
Treasury Secretary Scott Bessent on X: "Crypto is not a threat to the dollar. In fact, stablecoins can reinforce dollar supremacy. Digital assets are one of the most important phenomena in the world right now, yet they have been ignored by national governments for far too long. This administration is committed to https://t.co/vWsLgYyNW7" / X
Crypto is not a threat to the dollar. In fact, stablecoins can reinforce dollar supremacy. Digital assets are one of the most important phenomena in the world right now, yet they have been ignored by national governments for far too long. This administration is committed to https://t.co/vWsLgYyNW7
x.com
June 26, 2025 at 8:14 PM
It's clear that policymakers see the Genius Act in a similar light. Nearly every public statement about the act highlights its role in "reinforcing dollar supremacy"-- (in other words, increasing the demand for US treasuries).
x.com/SecScottBess...
x.com/SecScottBess...
The National Bank system, by requiring that national banks hold US debt in back of their note issuance, greatly encouraged banks to lend to the US government. Doing so helped stabilize the bond market and decrease the borrowing costs so the Union could fight the Civil War.
June 26, 2025 at 8:14 PM
The National Bank system, by requiring that national banks hold US debt in back of their note issuance, greatly encouraged banks to lend to the US government. Doing so helped stabilize the bond market and decrease the borrowing costs so the Union could fight the Civil War.
There's another important similarity between our current moment and 1863--a floundering bond market. Republicans in 1863, tired of printing greenbacks to finance the war, looked for a way to increase the demand for US treasuries so they could borrow cheaply.
June 26, 2025 at 8:14 PM
There's another important similarity between our current moment and 1863--a floundering bond market. Republicans in 1863, tired of printing greenbacks to finance the war, looked for a way to increase the demand for US treasuries so they could borrow cheaply.
The Genius Act, similar to the National Bank Act of 1863, requires public assets to act as collateral for private money issuance. Stablecoin issuers must hold US dollars, treasuries, or other similar assets in back of their coin issuance (this time at a 1:1 ratio).
June 26, 2025 at 8:14 PM
The Genius Act, similar to the National Bank Act of 1863, requires public assets to act as collateral for private money issuance. Stablecoin issuers must hold US dollars, treasuries, or other similar assets in back of their coin issuance (this time at a 1:1 ratio).
While the Genius Act could produce a more chaotic monetary environment similar to the Free Banking era, in which a variety of privately issued forms of money circulated, sometimes at a discount, it differs substantially in the system's connection to the federal government.
June 26, 2025 at 8:14 PM
While the Genius Act could produce a more chaotic monetary environment similar to the Free Banking era, in which a variety of privately issued forms of money circulated, sometimes at a discount, it differs substantially in the system's connection to the federal government.