I'm no fan of David Frum, but this is yet another example of popularizing an attitude that says a transaction without kyc is a transaction that is criminal.
The real advantage of stablecoins is that they allow asset holders to enter the U.S.-dollar system (99 percent of all stablecoins are U.S. dollar–pegged) while eluding normal U.S.-government rules, such as the “Know your customer” laws that expose bank depositors to intrusive questions about who they are and how they got their money.
It would be laughable if we had to check with some government agency before speaking in public, telling them where we got our ideas and what we plan on saying. Money shouldn't be any different than this. That we have come to a point where there is no presumption of monetary innocence does not bode well.
Estimates of the global pool of dirty or covert assets are about $36 trillion, or 10 percent of total global wealth—an ocean of money in search of a passage to legitimacy. There is something perverse about a plan to boost demand for Treasury debt by making it easier for crooks to circumvent U.S. laws against terrorist financing and money laundering.
Again, it should not be the case that we assume all money is illegal unless it has allowed governments, particularly the US government to bag and tag it. When have governments ever shown that they deserve this sort of wide-reaching insight into our daily lives?
When Frum tries to bring up what he considers to be the other dangers of stablecoins, he wanders into the laughable:
In 2024, a Texas-based pharmaceutical CEO tried to move some stablecoins to another user, but made a single-digit transcribing error—and misdirected his entire holdings, worth about $1 million.
If a single digit transcribing error produces this kind of result, I don't believe anyone would use stablecoins.