Sorry, But There’s Nothing Stable About Bitcoins OR Stablecoins

Policy Sorry, But There’s Nothing Stable About Bitcoins OR Stablecoins By John Tamny,

--:-- / --:--This voice experience is generated by AI. Learn more.This voice experience is generated by AI. Learn more.Summary. A recent analysis critiques the perceived stability of cryptocurrencies, noting Bitcoin's extreme volatility makes it impractical for everyday use. Milken Institute's Michael Piwowar suggests stablecoins, pegged to the U.S. dollar, offer a solution. However, the author disputes this, arguing the dollar itself lacks true stability. Before 1971, the dollar's gold link ensured constancy, but President Nixon's decision to sever this tie introduced significant instability, evidenced by today's vast currency trading. Therefore, stablecoins, as dollar derivatives, are inherently unstable. This has critical implications for crypto exchanges, which operate like banks, offering rewards on stablecoin deposits despite their foundational instability, bypassing traditional regulations.

100 US dollar banknotes symbols of the global economy spread out on a table in Clermont-Ferrand France on June 12 2025. (Photo by Romain Costaseca / Hans Lucas via AFP) (Photo by ROMAIN COSTASECA/Hans Lucas/AFP via Getty Images)Hans Lucas/AFP via Getty ImagesHow soon we forget that bitcoin and cryptocurrencies were billed as a response to centuries worth of fiat currency instability. The latter is worth noting for a variety of reasons, including a recent interview of Milken Institute senior advisor Michael Piwowar about money. Let’s start with Piwowar on bitcoin.