Peg Me, Crypto Daddy

Welcome to the Schmoozeletter Blog. Your source for weekly water cooler wisecracks from the world of finance. If you have an opinion different than mine or a topic you want to hear about, let me know!

It’s “Crypto Week” in Washington! It is certainly not Epstein Week. We are done talking about that hoax, says Donny.  

It’s boring. It’s a hoax. It’s honestly weird that you would even ask about it, weakling. 

If you had one iota of critical thinking left in your MAGAmind, you’d be outside burning your Trump flag right now, but you don’t. So you won’t.

Anyway, wouldn’t want to bore you. 

I’m sure Bezos ain’t bored with his copious cash. The past two months, the real-life Lex Luthor sold some of his AMZN stock for over $3 billion. Straight cash. 

According to an online calculator, that is over 70,000 pounds of $100 bills. It is over 56 million pounds of one-dollar coins if he wants to go swimming in his vault à la Scrooge McDuck.

Thank God money just became virtual this week so he doesn’t need to send a fleet of AMZN delivery vans to the local PNC to pick up his bullions. 

But enough mumbo jumbo… It’s crypto week, baby!

Cryptomania is running wild, brotha.

Every crypto is up!

And Cryptonians everywhere are celebrating!

Crypto is all about deregulation.
Crypto is all about bringing power back to the people.
Crypto is all about not being a slave to the United States dollar.
Crypto is all about taking down the dirty banks and crooked corporations with a new currency.

So in the new historic crypto bill that was just signed into law, we… made regulation to peg stablecoins to the United States dollar in a massive win for corporations.

Crypto week, baby!

What does “pegged to the U.S. dollar” really mean? This is…

Peg Me, Crypto Daddy

In the grand world of crypto, you’ve got your shitcoins, your memecoins, your fartcoins, your bitcoins, your Stanley Nickels, your central bank digital currencies (booo!), your platform coins, your privacy coins, your piracy coins, and your stablecoins.

The stablecoins are the ones that are “pegged” to different assets.

Check out the most popular cryptocurrencies and see if you can spot the stablecoins.

If you answered Tether (USDT) and USCoin (USDC), you would be right. See how the price is one dollar?

They will always be one dollar. So if you want to “cash out” of BTC, you can convert it to USDT. You would have the money without the risk of BTC taking a drastic downturn in price.

Plus, you are still in crypto, so you can keep telling everyone that you’re a genius and they will be left behind as United States dollars become obsolete.

Are you even a Cryptonian if you don’t go on lengthy soliloquies at dinner parties about how the United States dollar is a thing of the past?

So what does this new Crypto Week bill, the GENIUS Act, say?

In a nutshell, it says these stablecoins are legal and any company can issue them. 

The way USCoin (USDC) works is: when you get a $1 of USDC, the firm buys $1. As in, one actual United States dollar in the form a treasury bill. 

When you sell $1 of USDC, they give you back your actual United States dollar and the USDC token is “burned on the chain.”

The companies issuing stablecoins legally need to keep them in dollars. So if there is $75 billion USDC, Circle Internet Group, Inc. better be holding 75 billion U.S. dollars. 

This is actually stricter regulation than the normal banking industry, as your local Bank of America doesn’t need to keep all the customers’ deposits back in the safe, so to speak. They can loan them out.

So riddle me this:

How will crypto replace the U.S. dollar when it is pegged to the U.S. dollar?

And riddle me this: When chatting with your homies, do you say that car costs 0.35 BTC or that car costs $40,000?

And riddle me this: In the age of AI and quantum computing, we are supposed to believe some program Peter Todd came up with seventeen years ago called a cryptocurrency will never be decoded or hacked?

Okay, that last one is a bit off topic. 

But the more popular a stablecoin, the better for the United States dollar. 

Right now, 2 of the 7 most popular cryptos in the world are stablecoins pegged to the dollar. 

And the GENIUS Act has opened the door for any business, like Amazon or Walmart, to issue their own stablecoins like PrimeDollars or UnionBustingBucks.

Corporations like it because they won’t have to pay credit card fees if they have their own stablecoin payment network. The fees the company used to pay can be shifted onto the consumer… like you!

Crypto, the champion of the underdog!

Final Thought

"I could stand in the middle of Fifth Avenue and shoot somebody, and I wouldn't lose any voters, OK?" – Trump, 2016