WSJ: Stablecoins as 'Private Money' Pose Structural Risks to the Financial System

ChainCatcher reports that The Wall Street Journal has published an article stating that although the GENIUS Act and the CLARITY Act are advancing the regulatory compliance of stablecoins, their fundamental nature remains that of “private money,” potentially posing systemic risks to the financial system. The article notes that while stablecoins aim to combine the stability of the U.S. dollar with the efficiency of blockchain-based payments, they operate on fragmented, privatized infrastructure lacking the uniformity of the traditional dollar system. Although USDT and USDC are pegged to the U.S. dollar, their prices may still deviate from $1. Furthermore, stablecoin issuers face incentives to enhance yields by investing in high-risk, low-liquidity assets; should these assets decline in value, this could trigger de-pegging and concentrated redemption risks. Citing Chainalysis data, the article states that stablecoins account for 84% of crypto-related illicit activities, primarily involving sanctions evasion and money laundering, while genuine economic payment use cases represent less than 1%. The Wall Street Journal argues that stablecoins are replicating the historical path of private currency experiments during 19th-century America’s Free Banking Era, and may ultimately require stricter banking-style regulation and deeper integration into central bank systems.