The battle over stablecoins could weaken the US dollar.
(The Washington Post, Sam Lyman, March 31, 2026)
American banks are pushing to ban interest payments on dollar-pegged stablecoins, arguing that such yields would draw deposits away from the traditional banking system, while digital asset companies are asking to share with users the interest generated by the Treasury securities backing them.
China has just updated its digital yuan making it yield-bearing, allowing users to earn interest simply by holding it in their wallets, just as the US Congress blocks stablecoin regulation due to pressure from banks.
If banks prevail, they will protect their profits but strengthen Beijing’s efforts to erode the dollar’s hegemony, promoting the international adoption of the digital yuan through projects like mBridge and the Belt and Road initiative.
The battle over stablecoins could weaken the US dollar.
“Banks want to ban Americans from earning interest by holding stablecoins to protect their competitive moat and an important source of revenue, but this would harm the global competitiveness of the dollar and strengthen the Chinese digital yuan.”
China updates the digital yuan making it yield-bearing.
“On January 1, the People’s Bank of China launched a new version of the e-CNY that shares interest with users simply for holding the token, turning digital wallets into real savings accounts to accelerate adoption.”
American banks are playing into Beijing’s hands.
“By trying to hinder stablecoins, banks protect their profits but give China time to catch up, strengthening the Communist Party’s efforts to undermine the dollar’s hegemony through integrating the digital yuan into alternatives to international payment systems.”
Stablecoins can counter China’s challenge to the dollar.
“US policymakers should recognize that their most important geopolitical rival has launched a direct challenge to the dollar’s dominance with a yield-bearing digital yuan; allowing digital asset companies to share stablecoin yields would introduce competition into the banking sector and strengthen the dollar’s global position.”
The stablecoin market could reach $4 trillion.
“According to Citi analysts, the stablecoin market could grow to $4 trillion by the end of the decade; if users received even a small portion of the interest, the benefits for the dollar would be historic and the blow to the digital yuan decisive.”
Trump’s proposal will allow employees to invest in alternative assets with 401(k)s.
(The Washington Post, Andrew Ackerman, March 31, 2026)
The Trump administration’s new proposal would allow workers to use 401(k) retirement plans to invest in cryptocurrencies, private equity, and other alternative assets, previously mainly reserved for wealthy investors and institutions like pension funds and insurance companies.
Supporters argue that these private funds can offer higher returns than stocks over the long term and that greater diversification would benefit workers, while opponents highlight higher risks, elevated fees, and lower liquidity compared to traditional stocks and bonds.
The rule, still in draft form, stems from an executive order signed by Trump last summer and fits into the administration’s broader deregulatory push aimed at reducing financial sector rules to stimulate economic growth.
Trump’s proposal will allow employees to invest in alternative assets with 401(k)s.
“Employees could use their workplace retirement plans to invest in cryptocurrencies, private equity, and other ‘alternative assets’ under a proposal released Monday by the Trump administration’s Department of Labor.”
Victory for Wall Street and the alternative investment industry.
“The plan represents a win for Wall Street, which has lobbied for broader access to these products, many of which have long been the domain of the wealthy and large institutional investors like pension funds and insurance companies.”
Supporters cite higher returns and diversification.
“Supporters say private funds can offer better returns than stocks over the long term and that this greater diversity will drive innovation and represent a big win for American workers, retirees, and their families.”
Elizabeth Warren harshly criticizes the proposal.
“Elizabeth Warren attacked the proposal, saying it will expose Americans’ retirement accounts to overly risky assets, just to let Trump’s Wall Street friends have more money to play with.”
Fiduciaries will be able to decide without fear of lawsuits.
“The Trump administration has promised to change the current dynamic, stating that plan fiduciaries – not opportunistic lawyers – should have the authority to decide which investment options to include in retirement plans, thus reducing frivolous lawsuits and expanding choices for savers.”
(Excerpt from the newsletter by Giuseppe Liturri)
