Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
This article aligns w/what I've been saying for a few months now -- that over the next several years, we'll see global trade/fiance starting to work with, versus being dependent on, the United States and the US Dollar. It's also partly why I've been skewing several of my new equity purchases overseas.
The 24/7 media loves it. Bad (possible) news sells great. You click and read, and they make money.
============= catch22:
suicide...ignorance...'cult'
Another day and another political post. How can it be that everything that was done since 01/2025 is the above, while the previous administration's actions were all right and great? If you think the outcome is pretty bad, follow it and invest it all in MM.
I just finished part one of "Our Dollar Your Problem" by Kenneth Rogoff which looks at dollar dominance and the future of the dollar. The dollar is used in about 90% of global trades, but the US economy has declined to about 25% of the global economy. Counties have historically had the dominant "safe asset" for about 200 years, so the US is past the mid-point.
Gross Federal debt now stands at 119% of GDP which is the highest level since WWII. All three rating agencies have lowered the rating on Federal debt. Clearly, there is room for some concern that the US will continue the current slow trend of losing dollar dominance, but the timing is uncertain.
The price to earnings ratio of S&P 500 is currently 29.5 which puts it at the highest 95th percentile since WWII. The S&P500 has returned 7% in 2025 compared to 17% for large cap international core funds while the P/E of international stocks is about a third lower than the S&P 500. Being overweight international stocks has really helped diversified portfolios this year.
The purported role of stablecoin is to have a more stable currency backed method of reducing the cost of global trade. The global financial system will look dramatically different fifty years from now. The dollar has declined 10% year to date. Purchasing agents often have the ability to purchase goods in other currencies in addition to the dollar.
Under the GENIUS Act that is the 1st US crypto law, stablecoins will require backing with collateral - T-Bills/Notes, CDs, etc. That would support their dollar pegs, which would still be on a best-efforts basis. So, if the stablecoin sponsor goes bankrupt, there will be recovery based on the value of the collateral held. One thought is that this will boost the demand for Treasuries. So, more crypto stablecoins to be good for the US Treasury and economy?
But if the dollar declines against other currencies, so will the pegged stablecoins. The "stable" in the name isn't to fix future dollar depreciation.
BTW, another Anti-CBDC bill was passed narrowly by the House and is with the Senate. It will ban the Fed from issuing digital-dollar. The idea is not to have competition with privately-issued stablecoins. Notably, there are already foreign CBDCs, e.g. digital-yuan. So, while the US is catching up with crypto centers in Abu Dhabi and Dubai in UAE, it won't participate in global CBDCs (due to Anti-CBDC bill, if/when that's approved).
The Clarity bill for crypto classifications - commodities, securities, stablecoins - also cleared the House easily and is now with the Senate.
The so called Crypto Week turned out to be better than expected. If you have ignored the cryptos so far, it may be time to take another look.
There are growing concerns about nonbank financials, and now add non-Fed/Treasury money to those.
Hi @yogibearbull Thank you for you reporting on the serious piece(s) of legislation. I'll add with some redundancy.
The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), signed into law by President Donald Trump on July 18, 2025, establishes the first federal regulatory framework for payment stablecoins in the United States. The Act aims to provide regulatory clarity and foster innovation in the stablecoin market while safeguarding consumers and bolstering the U.S. dollar's position in global finance.
Here's a summary of the key provisions and their implications:
Payment Stablecoins Defined: The Act specifically defines "payment stablecoins" as digital assets designed for payment or settlement, with a stable value pegged to a fixed amount of monetary value, typically the U.S. dollar.
Dual Regulatory Framework: The Act establishes a dual federal-state system for regulating stablecoin issuers, allowing for both federal and state-level oversight under substantially similar standards, according to a fact sheet from the Senate Committee on Banking, Housing, and Urban Affairs. Smaller issuers, with under $10 billion in outstanding issuance, may choose state regulation, provided the state's framework is certified as comparable to the federal standards by the Stablecoin Certification Review Committee.
Reserve Requirements: The GENIUS Act mandates 100% reserve backing for payment stablecoins with high-quality liquid assets, such as U.S. dollars and short-term Treasuries. These reserves must be held in segregated accounts and cannot be commingled with other assets. Issuers are also prohibited from rehypothecating reserves or using risky assets like corporate debt or equities as backing. Issuers are also required to provide monthly public disclosures of their reserve composition, according to WilmerHale, and larger issuers must submit annual audited financial statements.
Consumer Protection: The legislation emphasizes consumer protection through various measures:
Prohibiting misleading marketing: Issuers are barred from claiming their stablecoins are backed by the U.S. government, federally insured, or legal tender. Ensuring clear redemption policies: Issuers must publicly disclose redemption policies with clear procedures and transparent fee structures, according to Paul Hastings LLP. Prioritizing stablecoin holders in insolvency: In bankruptcy, holders of permitted payment stablecoins have priority over other claims regarding reserve assets. Anti-Money Laundering (AML) and Sanctions Compliance: The Act subjects stablecoin issuers to the Bank Secrecy Act, requiring them to implement robust AML programs, including customer identification, transaction monitoring, and compliance with sanctions regulations. Foreign issuers seeking to operate in the U.S. must meet comparable non-U.S. regulatory standards and comply with U.S. sanctions orders.
Reinforcing the U.S. Dollar: By requiring stablecoin reserves to be held in U.S. dollars and Treasuries, the Act aims to reinforce the dollar's role as the global reserve currency and potentially increase demand for U.S. government debt.
Limitations on Stablecoin Activities: Permitted issuers are restricted to activities directly related to issuing, redeeming, and managing stablecoins and their reserves, according to Gibson Dunn. The Act also prohibits the offering of interest or yield on stablecoin holdings.
Impact on the Crypto Market: The GENIUS Act is expected to pave the way for greater adoption of stablecoins in mainstream financial services. Banks, nonbanks, and credit unions may now more confidently explore issuing their own stablecoins. The Act aims to bridge the gap between traditional finance and the digital asset ecosystem by providing a clear regulatory environment.
Extraterritorial Reach: The Act asserts U.S. regulatory authority over foreign stablecoin issuers that offer or sell stablecoins to persons located in the United States.
Effective Date and Rulemaking: While the Act was signed into law on July 18, 2025, many key provisions will not take effect immediately. Federal and state regulators are tasked with issuing implementing regulations within a specified timeframe, and full implementation is anticipated to unfold over several years. Overall, the GENIUS Act is a significant step towards integrating stablecoins into the U.S. financial system. While supporters hail it as a move towards innovation and consumer protection, critics express concerns about potential risks and loopholes within the framework.
"Prioritizing stablecoin holders in insolvency: In bankruptcy, holders of permitted payment stablecoins have priority over other claims regarding reserve assets."
A casual reading may mean that if a bank is involved with stablecoins, and goes bankrupt, or needs the FDIC rescue, the claims of stablecoin holders may be ahead of this FDIC insured depositors.
I don't know if this issue was clarified in the final GENIUS Act.
I don't think this really clarifies stablecoin vs FDIC, at least to me. Muddy waters for me.
--- However, it is important to note that FDIC insurance does not directly apply to stablecoins themselves. FDIC insurance protects deposits held in insured banks and credit unions up to $250,000 in the unlikely event of a bank's failure. While the GENIUS Act does permit issuers to hold reserves in FDIC-insured depository institutions, this only protects the underlying fiat currency held as reserves, not the stablecoins themselves. Some stablecoin issuers may tout pass-through FDIC insurance, which applies if the bank holding the collateral fails, but it's crucial to understand the limitations of such coverage and that it doesn't guarantee the full value of the stablecoins if the issuer itself becomes insolvent. The primary risk with stablecoins remains the issuer's ability to redeem them for the underlying assets, rather than the risk of the banking system itself.
I have had no interest in cryptocurrency because of fraud and theft. Stablecoins are growing in popularity. I have concerns over them becoming a shadow banking system and increasing financial instability. At my age, I don't expect to use them during my lifetime, but they warrant following for their potential impact on the global financial system.
"Dollar-backed stablecoins could help reinforce the U.S. dollar's dominance in global finance, but their rapid growth brings new risks to financial stability, consumer protection, and monetary sovereignty.
For everyday users, stablecoins offer speed and access, but also expose them to new forms of uncertainty. “The big risk is that people will get to feel comfortable holding wealth in stablecoins under the assumption they are secure and well-regulated," Baker [co-director of the Center for Economic and Policy Research] warned. "They may then find that their specific stablecoin was not stable and they are suddenly holding a near-worthless asset.”
For many in Asia, Africa, Middle East, and elsewhere, where there are many restrictions on currencies, and holding dollar (or other hard-currency assets) is almost impossible, suddenly, there are dollar-asset-backed stablecoins. They can be bought, held & transacted in - no questions asked. Of course, there can be abuse and some illegal activities too.
That may be one reason that gold took back seat after cryptos came along, although lately, gold has been surging too.
Many top stablecoins are dollar-backed (following list is from Forbes - "The Capitalist Tool"). Some may have shaky or no collateral now, but the GENIUS Act will apply to those too. So, if there is going to be nongovernment money around, it's good to have some safeguards. @WABAC, in fact, the idea is to avoid wild-cat banking disasters. https://www.forbes.com/digital-assets/categories/stablecoins/?sh=7c78b0ba1cd0
@WABAC, if you look at Tether quotes for ALL times at CNBC, Tether got badly un-tethered in 2014, but has been quite stable around 1.00 since 2020.
Unfortunately, some other stablecoins didn't fare as well in the unregulated environment and many people lost money. But now, the prices will matter only after the effective date of the GENIUS Act - 120 days after final regulations are issued, or 1/18/27 (18 months after 7/18/25), whichever is earlier.
IMO, with major stablecoins such as Tether ($162 billion market-cap), USDC ($65 billion market-cap), etc, may be as good as the true effective date after 7/18/25.
Those who travel a lot may appreciate the value of a stablecoin account that can be accessed anytime (24/7) from anywhere in the world, rather than carrying around cash $s or global ATM cards (Schwab or Fido - no ATM fees).
Note the 24/7 aspect - bank account access is limited to bank business days, and money-market fund access is limited to market business days (some may remember that, technically, the money-market funds were unavailable for almost a week after 9/11 until the Fed told the banks that it was OK to fly blind for a week for good customers). Credit cards overseas can be hit with up to 4% transaction fees plus 3% currency exchange fee - that's 7% hole right at the start. BTW, even cash $ isn't accepted in many countries now (I know about India) UNLESS one goes to a central bank branch (not any bank) to exchange it.
What is it that I'm missing? MFO followers, if you go to ten stores that you use, how many would take your stable coin payment? Has anyone used it to pay their taxes? Will ATM's work?
@yogibearbull thank you for correcting my quick glance. And I do understand the uses you describe.
In theory, they make more sense to me than free-floating crypto. And I hope they stay well regulated. But I don't see many uses for me in my daily life.
OTOH, they're not exactly a silver certificate, i.e., they can't be redeemed for whatever the collateral is, or can they? That would make them much more interesting.
Those who travel a lot may appreciate the value of a stablecoin account that can be accessed anytime (24/7) from anywhere in the world, rather than carrying around cash $s or global ATM cards (Schwab or Fido - no ATM fees).
Note the 24/7 aspect - bank account access is limited to bank business days, and money-market fund access is limited to market business days
Speaking as someone who just withdrew euros from an ATM today (Sunday), I can say that we had no problem accessing our Fidelity CMA account. Card is issued by Leader Bank and administered by BNY Mellon, both closed today. And the cash at Fidelity is sitting in a MMF (not core account).
These transactions are often not executed in real time. They can show up as pending transactions. This particular withdrawal hasn't yet shown up as pending, but the amount I can withdraw today by ATM was reduced by the amount withdrawn.
Credit cards overseas can be hit with up to 4% transaction fees plus 3% currency exchange fee - that's 7% hole right at the start.
Maybe I'm just blind, but I still don't see a virtue in cryptocurrency, stable or not. As to the OP, while I almost always stay the course regardless of current events (and already have a healthy percentage allocated to foreign investments), like rforno I have been looking at how to restructure my portfolio for more foreign exposure.
@yogibearbull said: "BTW, another Anti-CBDC bill was passed narrowly by the House and is with the Senate. It will ban the Fed from issuing digital-dollar. The idea is not to have competition with privately-issued stablecoins."
Wow. Unreal. We have treasury and government agency and municipal debt. And we have corporate debt, or "privately-issued" debt. Not sure why there is a conflict here.
@Charles, a government-issued digital-dollar (with implied guarantees from Uncle Sam) would be seen by the crypto industry as conflicting with lucrative and profitable private-issue stablecoin operations.
You can see this in FDIC-insured money-market accounts vs uninsured (but almost equally safe) money-market funds. Former typically offer lower yields (except briefly during the ZIRP).
There were 2 paths for nongovernment money - (i) make them illegal, as for most of the US history, and they are still illegal in many countries, OR (ii) once the cryptos slipped through somehow, at least properly regulate them.
BTW, for those interested, I have a 3-part series on cryptos. My interests beyond ordinary curiosity in them are also educational.
CRYPTOS - An In-Depth Series Due to high current interest in cryptos following the CRYPTO WEEK, I am releasing a 3-part series on cryptos with Parts 2 & 3 yet to be published formally in #IndoUSTribune. CRYPTOS (Part 1) – INTRODUCTION CRYPTOS (Part 2) - BITCOIN, ETHER, STABLECOINS CRYPTOS (Part 3) - ETPs/ETFs https://ybbpersonalfinance.proboards.com/thread/870/cryptos-depth-series
The stablecoin accounts have 24/7 access from anywhere in the world & may be great for international travelers. They would also lead to democratization of the dollar in that dollar-backed stablecoins can be held by anyone anywhere. ************************************** Yet, I understand that stablecoins cannot be converted into the dollars allegedly backing the stablecoins' value.
Not for me. No how, no way. Smells like a dead rat.
The stablecoin accounts have 24/7 access from anywhere in the world & may be great for international travelers. They would also lead to democratization of the dollar in that dollar-backed stablecoins can be held by anyone anywhere. ************************************** Yet, I understand that stablecoins cannot be converted into the dollars allegedly backing the stablecoins' value.
Not for me. No how, no way. Smells like a dead rat.
Not true. When I dabbled in crypto-staking for interest payments several years ago* I was in the Gemini dollar stablecoin and was able to convert it into USD easily and move it into my bank account without problems. Even now, at my new BTC exchange, I can cash the BTC into USD and move it easily.
* and thankfully got out intact a few months later, as the deeper I dug, the more queasy I got over things like black-box counterparty risks which turned out to be 100% prescient and very reminiscent of the conditions leading up to the GFC. And just like in '06-08, lots of (generally clueless) folks got burned, too,
So, it's the reserves that are untouchable, then? *********************** Still, like Buffett and the late Charlie Munger, I ask: where's the intrinsic value? There is none.
Many sources are reporting that the forthcoming Executive Order on 401k will allow private-equity, gold and cryptos. I don't see anything yet on https://www.whitehouse.gov/.
IMO this will get ugly / confusing really quickly. Think about how every major company, from Amazon and Walmart to Exxon to CVS to whomever, launches their own stablecoin. You think it's hard enough keeping those 'customer discount' cards straight? This is going to be a nightmare, I think....and what if one company doesn't accept another's stablecoin for purchase? Are people going to have little chunks of stablecoins silo'd off in various accounts? Talk about an administrative PITA!
I'll stick with Bitcoin and/or Ether, thankyouverymuch.
Comments
05/2007 (https://bendbulletin.com/2007/05/21/analysts-gain-wont-change-dollars-decline/)
10/2013 (https://www.cnbc.com/2013/10/22/de-crowning-the-dollar-and-the-collapse-ahead.html)
07/2020 (https://www.ft.com/content/712fe3e7-6bfd-46be-9fbc-6b992aa0d043)
The 24/7 media loves it. Bad (possible) news sells great. You click and read, and they make money.
=============
catch22: Another day and another political post.
How can it be that everything that was done since 01/2025 is the above, while the previous administration's actions were all right and great?
If you think the outcome is pretty bad, follow it and invest it all in MM.
Gross Federal debt now stands at 119% of GDP which is the highest level since WWII. All three rating agencies have lowered the rating on Federal debt. Clearly, there is room for some concern that the US will continue the current slow trend of losing dollar dominance, but the timing is uncertain.
The price to earnings ratio of S&P 500 is currently 29.5 which puts it at the highest 95th percentile since WWII. The S&P500 has returned 7% in 2025 compared to 17% for large cap international core funds while the P/E of international stocks is about a third lower than the S&P 500. Being overweight international stocks has really helped diversified portfolios this year.
The purported role of stablecoin is to have a more stable currency backed method of reducing the cost of global trade. The global financial system will look dramatically different fifty years from now. The dollar has declined 10% year to date. Purchasing agents often have the ability to purchase goods in other currencies in addition to the dollar.
But if the dollar declines against other currencies, so will the pegged stablecoins. The "stable" in the name isn't to fix future dollar depreciation.
BTW, another Anti-CBDC bill was passed narrowly by the House and is with the Senate. It will ban the Fed from issuing digital-dollar. The idea is not to have competition with privately-issued stablecoins. Notably, there are already foreign CBDCs, e.g. digital-yuan. So, while the US is catching up with crypto centers in Abu Dhabi and Dubai in UAE, it won't participate in global CBDCs (due to Anti-CBDC bill, if/when that's approved).
The Clarity bill for crypto classifications - commodities, securities, stablecoins - also cleared the House easily and is now with the Senate.
The so called Crypto Week turned out to be better than expected. If you have ignored the cryptos so far, it may be time to take another look.
There are growing concerns about nonbank financials, and now add non-Fed/Treasury money to those.
The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins), signed into law by President Donald Trump on July 18, 2025, establishes the first federal regulatory framework for payment stablecoins in the United States. The Act aims to provide regulatory clarity and foster innovation in the stablecoin market while safeguarding consumers and bolstering the U.S. dollar's position in global finance.
Here's a summary of the key provisions and their implications:
Payment Stablecoins Defined: The Act specifically defines "payment stablecoins" as digital assets designed for payment or settlement, with a stable value pegged to a fixed amount of monetary value, typically the U.S. dollar.
Dual Regulatory Framework: The Act establishes a dual federal-state system for regulating stablecoin issuers, allowing for both federal and state-level oversight under substantially similar standards, according to a fact sheet from the Senate Committee on Banking, Housing, and Urban Affairs. Smaller issuers, with under $10 billion in outstanding issuance, may choose state regulation, provided the state's framework is certified as comparable to the federal standards by the Stablecoin Certification Review Committee.
Reserve Requirements: The GENIUS Act mandates 100% reserve backing for payment stablecoins with high-quality liquid assets, such as U.S. dollars and short-term Treasuries. These reserves must be held in segregated accounts and cannot be commingled with other assets. Issuers are also prohibited from rehypothecating reserves or using risky assets like corporate debt or equities as backing. Issuers are also required to provide monthly public disclosures of their reserve composition, according to WilmerHale, and larger issuers must submit annual audited financial statements.
Consumer Protection: The legislation emphasizes consumer protection through various measures:
Prohibiting misleading marketing: Issuers are barred from claiming their stablecoins are backed by the U.S. government, federally insured, or legal tender.
Ensuring clear redemption policies: Issuers must publicly disclose redemption policies with clear procedures and transparent fee structures, according to Paul Hastings LLP.
Prioritizing stablecoin holders in insolvency: In bankruptcy, holders of permitted payment stablecoins have priority over other claims regarding reserve assets.
Anti-Money Laundering (AML) and Sanctions Compliance: The Act subjects stablecoin issuers to the Bank Secrecy Act, requiring them to implement robust AML programs, including customer identification, transaction monitoring, and compliance with sanctions regulations. Foreign issuers seeking to operate in the U.S. must meet comparable non-U.S. regulatory standards and comply with U.S. sanctions orders.
Reinforcing the U.S. Dollar: By requiring stablecoin reserves to be held in U.S. dollars and Treasuries, the Act aims to reinforce the dollar's role as the global reserve currency and potentially increase demand for U.S. government debt.
Limitations on Stablecoin Activities: Permitted issuers are restricted to activities directly related to issuing, redeeming, and managing stablecoins and their reserves, according to Gibson Dunn. The Act also prohibits the offering of interest or yield on stablecoin holdings.
Impact on the Crypto Market: The GENIUS Act is expected to pave the way for greater adoption of stablecoins in mainstream financial services. Banks, nonbanks, and credit unions may now more confidently explore issuing their own stablecoins. The Act aims to bridge the gap between traditional finance and the digital asset ecosystem by providing a clear regulatory environment.
Extraterritorial Reach: The Act asserts U.S. regulatory authority over foreign stablecoin issuers that offer or sell stablecoins to persons located in the United States.
Effective Date and Rulemaking: While the Act was signed into law on July 18, 2025, many key provisions will not take effect immediately. Federal and state regulators are tasked with issuing implementing regulations within a specified timeframe, and full implementation is anticipated to unfold over several years.
Overall, the GENIUS Act is a significant step towards integrating stablecoins into the U.S. financial system. While supporters hail it as a move towards innovation and consumer protection, critics express concerns about potential risks and loopholes within the framework.
"Prioritizing stablecoin holders in insolvency: In bankruptcy, holders of permitted payment stablecoins have priority over other claims regarding reserve assets."
A casual reading may mean that if a bank is involved with stablecoins, and goes bankrupt, or needs the FDIC rescue, the claims of stablecoin holders may be ahead of this FDIC insured depositors.
I don't know if this issue was clarified in the final GENIUS Act.
--- However, it is important to note that FDIC insurance does not directly apply to stablecoins themselves. FDIC insurance protects deposits held in insured banks and credit unions up to $250,000 in the unlikely event of a bank's failure. While the GENIUS Act does permit issuers to hold reserves in FDIC-insured depository institutions, this only protects the underlying fiat currency held as reserves, not the stablecoins themselves. Some stablecoin issuers may tout pass-through FDIC insurance, which applies if the bank holding the collateral fails, but it's crucial to understand the limitations of such coverage and that it doesn't guarantee the full value of the stablecoins if the issuer itself becomes insolvent. The primary risk with stablecoins remains the issuer's ability to redeem them for the underlying assets, rather than the risk of the banking system itself.
it will be different this time, of course.
https://www.msn.com/en-us/money/markets/are-stablecoins-a-threat-to-the-us-dollar-dominance-what-it-means-for-your-wallet/ar-AA1IFgDU?ocid=msedgdhp&pc=DCTS&cvid=9a2830067523446cb167f6888e00dc4c&ei=25
"Dollar-backed stablecoins could help reinforce the U.S. dollar's dominance in global finance, but their rapid growth brings new risks to financial stability, consumer protection, and monetary sovereignty.
For everyday users, stablecoins offer speed and access, but also expose them to new forms of uncertainty. “The big risk is that people will get to feel comfortable holding wealth in stablecoins under the assumption they are secure and well-regulated," Baker [co-director of the Center for Economic and Policy Research] warned. "They may then find that their specific stablecoin was not stable and they are suddenly holding a near-worthless asset.”
For many in Asia, Africa, Middle East, and elsewhere, where there are many restrictions on currencies, and holding dollar (or other hard-currency assets) is almost impossible, suddenly, there are dollar-asset-backed stablecoins. They can be bought, held & transacted in - no questions asked. Of course, there can be abuse and some illegal activities too.
That may be one reason that gold took back seat after cryptos came along, although lately, gold has been surging too.
Many top stablecoins are dollar-backed (following list is from Forbes - "The Capitalist Tool"). Some may have shaky or no collateral now, but the GENIUS Act will apply to those too. So, if there is going to be nongovernment money around, it's good to have some safeguards. @WABAC, in fact, the idea is to avoid wild-cat banking disasters.
https://www.forbes.com/digital-assets/categories/stablecoins/?sh=7c78b0ba1cd0
But a quick glance at Tether shows that the value does fall below a dollar from time to time. It should be noted that it also rises above a dollar.
Maybe this new law will fix that problem.
Unfortunately, some other stablecoins didn't fare as well in the unregulated environment and many people lost money. But now, the prices will matter only after the effective date of the GENIUS Act - 120 days after final regulations are issued, or 1/18/27 (18 months after 7/18/25), whichever is earlier.
IMO, with major stablecoins such as Tether ($162 billion market-cap), USDC ($65 billion market-cap), etc, may be as good as the true effective date after 7/18/25.
Those who travel a lot may appreciate the value of a stablecoin account that can be accessed anytime (24/7) from anywhere in the world, rather than carrying around cash $s or global ATM cards (Schwab or Fido - no ATM fees).
Note the 24/7 aspect - bank account access is limited to bank business days, and money-market fund access is limited to market business days (some may remember that, technically, the money-market funds were unavailable for almost a week after 9/11 until the Fed told the banks that it was OK to fly blind for a week for good customers). Credit cards overseas can be hit with up to 4% transaction fees plus 3% currency exchange fee - that's 7% hole right at the start. BTW, even cash $ isn't accepted in many countries now (I know about India) UNLESS one goes to a central bank branch (not any bank) to exchange it.
https://www.cnbc.com/quotes/USDT.CM=
In theory, they make more sense to me than free-floating crypto. And I hope they stay well regulated. But I don't see many uses for me in my daily life.
OTOH, they're not exactly a silver certificate, i.e., they can't be redeemed for whatever the collateral is, or can they? That would make them much more interesting.
After all, there are gold-ATMs in Asia and the Middle East. There are some in the US too,
https://goldatm.com/locations/
Can crypto-ATMs be behind?
Actually, there are many already. Find US crypto-ATMs here,
https://coinatmradar.com/country/226/bitcoin-atm-united-states/
Note the 24/7 aspect - bank account access is limited to bank business days, and money-market fund access is limited to market business days
Speaking as someone who just withdrew euros from an ATM today (Sunday), I can say that we had no problem accessing our Fidelity CMA account. Card is issued by Leader Bank and administered by BNY Mellon, both closed today. And the cash at Fidelity is sitting in a MMF (not core account).
These transactions are often not executed in real time. They can show up as pending transactions. This particular withdrawal hasn't yet shown up as pending, but the amount I can withdraw today by ATM was reduced by the amount withdrawn.
Credit cards overseas can be hit with up to 4% transaction fees plus 3% currency exchange fee - that's 7% hole right at the start.
Or even more, if you have the amount charged converted to dollars at the point of sale (dynamic currency conversion). Never do this. It can cost you as much as 12%.
https://www.bankrate.com/personal-finance/foreign-transaction-fees-vs-currency-conversion-fees/
Maybe I'm just blind, but I still don't see a virtue in cryptocurrency, stable or not. As to the OP, while I almost always stay the course regardless of current events (and already have a healthy percentage allocated to foreign investments), like rforno I have been looking at how to restructure my portfolio for more foreign exposure.
Wow. Unreal. We have treasury and government agency and municipal debt. And we have corporate debt, or "privately-issued" debt. Not sure why there is a conflict here.
You can see this in FDIC-insured money-market accounts vs uninsured (but almost equally safe) money-market funds. Former typically offer lower yields (except briefly during the ZIRP).
There were 2 paths for nongovernment money - (i) make them illegal, as for most of the US history, and they are still illegal in many countries, OR (ii) once the cryptos slipped through somehow, at least properly regulate them.
BTW, for those interested, I have a 3-part series on cryptos. My interests beyond ordinary curiosity in them are also educational.
CRYPTOS - An In-Depth Series
Due to high current interest in cryptos following the CRYPTO WEEK, I am releasing a 3-part series on cryptos with Parts 2 & 3 yet to be published formally in #IndoUSTribune.
CRYPTOS (Part 1) – INTRODUCTION
CRYPTOS (Part 2) - BITCOIN, ETHER, STABLECOINS
CRYPTOS (Part 3) - ETPs/ETFs
https://ybbpersonalfinance.proboards.com/thread/870/cryptos-depth-series
**************************************
Yet, I understand that stablecoins cannot be converted into the dollars allegedly backing the stablecoins' value.
Not for me. No how, no way. Smells like a dead rat.
* and thankfully got out intact a few months later, as the deeper I dug, the more queasy I got over things like black-box counterparty risks which turned out to be 100% prescient and very reminiscent of the conditions leading up to the GFC. And just like in '06-08, lots of (generally clueless) folks got burned, too,
"All issuers would be required to hold reserves in cash or US Treasurys, undergo regular audits, and publicly disclose their holdings and redemption processes."
So, it's the reserves that are untouchable, then?
***********************
Still, like Buffett and the late Charlie Munger, I ask: where's the intrinsic value? There is none.
I'll stick with Bitcoin and/or Ether, thankyouverymuch.