SALT-n-pessimism

And I'm Darren Woods. Today, mingling with us once more, our Planet Money, muchacho, the marvelous Mr. Kenny Malone.

On today's show, the Senate and stablecoins,

That's all after the break.

My indicator is $27.6 trillion. That's a measure of how much people are using stablecoins globally. Last year, there was $27.6 trillion worth of trading payments and transfers on stablecoins like tether. And I bring this up because the Senate has just passed a bill that might bring special regulation for these cryptocurrencies for the first time.

Yes. And so a reminder of what stablecoins are, they are cryptocurrencies whose value is pegged to something else, often the US Dollar. So unlike Bitco, Bitcoin or ether, whose values fluctuate wildly, you are promised that when you buy one of these cryptocurrencies, it'll stay basically the same. And because of this apparent certainty, stablecoins are increasingly popular. We'll link to our full explainer on stablecoins in the show. Notes. These cryptocurrencies are often used for people sending money across borders who would otherwise face high bank fees and delays. Or they're used in countries where inflation is high. Also for scams and drug deals and ransoms.

There's many use cases. As Wayland said. To be clear, the things I just mentioned are illegal anyway. They don't need special regulation. But the coins themselves seem to. So the bill does a few things. First, it says that companies that run stablecoins need to hold the equivalent amount of actual US Dollars or cl. Close equivalents like US treasury bonds.

Then it clarifies who's in charge of regulating Stablecoins in the U.S. the bill says for large stablecoins, it's the Office of the Comptroller of the Currency. And for the smaller Stablecoins. It's actually up to the state where the stablecoin company is based.

Yeah. And you've hit on a major criticism of the bill. Berkeley economist Barry Eichengreen wrote an op ed in the New York Times this week. He pointed out that regulators couldn't move fast enough to act when Silicon Valley Bank's assets were vaporizing a few years ago. And so he's sceptical that regulators will be able to scrutinize the hundreds or even thousands of stablecoins that could be issued all over the country. Supporters of the bill, though, say that this at least gives some rules of the road as opposed to none.

Yeah, members of Congress can't shield the stablecoin game, but presidents and their families, they are notably excluded.

This is the salt cap that you hear people talking about.

I find this debate super interesting because salt really cuts across party beliefs. Higher salt caps really benefit people who own a lot of property and are paying a lot of taxes. That is wealthy people.

And yet it's the blue states that benefit the most from increasing salt because they tend to have higher taxes. And so you'll have Democratic New York Senator Chuck Schumer. He's snarling at some of the Republicans for not wanting to raise the cap.

Now, what's suddenly alive on arrival is Waylon's segment.

Okay. A very traditional role kind of explanation of things. Is there more to it than this?

And if those men do get raises, well, maybe they should go to the grocery store and see how far their paychecks stretch.