YouSaid · the spoken record

Chris Giancarlo

lines on the record: 19
first: 2025-09-02
most recent: 2025-09-02
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Wanted a dollar in South Africa, just jolly well couldn't get one. Now you can't. You can hold it in your Coinbase wallet. And every time you buy one, there's a dollar of treasury credit created. So if there are to be conservative, let's say that there are two billion adults living outside the US that would rather hold their entire net worth in dollars than anything else and currently don't hold any dollars. And if you just attribute $5,000 per person across 2 billion people annually, if you just start doing that math, that becomes material pretty quickly.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“I absolutely do because obviously by definition anything that increases demand for dollars increases demand for treasuries, right? Because that's the way the dollars are created. And the way I think about it is, as we've discussed, there are a lot of uses for stablecoins, but be killer use case for stablecoin is the ability of foreigners to hold US dollar equivalents. And so the more that people in South Africa, India, China, Brazil, the more they realize that they don't have to be exposed to their political currencies locally or their inflationary currencies locally, and they can actually hold their wealth in dollar equivalents, the more they will want that. And every time a new token is issued, another dollar of treasury securities has to be bought. So I think that's one of the best things about the genius act is it will unleash demand for the dollar at levels that were never previously possible because no matter how much you”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I think marginal is the right word here. Scott Bessant has spoken about how stablecoin capitalization, stablecoin circulation, could rise to $2 trillion or something along those lines where there are, what, some $30 trillion worth of treasuries out there in the market. So this is not going to transform the demand for treasuries or radically reduce the required rate of return, but it is potentially another marginal source of demand. If you subscribe to the argument I made before about how there can be runs on stablecoins if people worry about whether the collateral is there, then there can be rapid liquidation treasuries and more instability. In the market as well.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“Well, it depends on if you trust your bettors or if you'd rather be free. This is an ideological question. I don't want the government to get to approve or disapprove every transaction that I personally enter into. I don't want to live in that world. This is where there is a bit of an ideological split in this country. Some think that in the wrong hands, that power will be used to cut people off from the financial system that they don't like. So do you want that to happen at scale? And I don't. Stablecoins are based on decentralized consensus mechanism that nobody's in charge of. So there's nobody you have to trust.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“Well, I think central bank digital currencies have more promise because they don't threaten the singleness of money and the central bank can stand behind them in the same way that it can stand behind deposit accounts at the Federal Reserve. And I think it's not a coincidence that the United States is going down this stablecoin road because there is opposition in Congress in part fueled by deep and abiding suspicion of ceding more power to the central bank. You know, the kind of suspicion of concentrated financial power that goes back to Andrew Jackson in the 1830s, that means we are unlikely to have central bank digital currency in the United States anytime soon.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“I don't see this as feeling anything like the Wildcat banking you're in part because the binding constraint on the ability to issue stablecoins is still bank focused. It is how many bank deposits are available to back these things or how many treasury securities are available to back these things. So the thing about the Wildcat banking era, which was the era before the OCC was created, it's before the National Bank Act really, the Wildcat Banking Era was based on the idea that every bank issued its own banknotes and they called them all dollars, but the underlying reserve assets differed from bank to bank, right? So a dollar, this bank was not worth the same as a dollar at that bank. The whole point of the Genius Act is to require that all stablecoins, however their title, are backed by the same set of assets. And when the National Bank Act was passed in 1863, the main thing it did at that time was require all banks to hold treasury securities and to hold them in a certain ratio.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“Gives me a modest amount of comfort, but again, the money market fund example is directly analogous. The free banking era, again, the notes were supposed to be fully collateralized by high quality assets. And we know from many, many historical examples that what is a high quality asset on one day can be lower quality on the next. look at the balance sheets that are released by big stable coins like Tether some of their assets are held in the form of bank deposits but those bank deposits can So when Silicon Valley Bank had trouble, some of the big stablecoins had their reserves, their shares went to a discount. I don't see what in principle will guarantee that that can't happen again.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“Of course, I mean, the Genius Act does require that stablecoin is yours, hold collateral against these coins. And it has to be high quality. And the vast majority is basically going to be held one for one to treasuries. So does that give you any comfort?”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“And guaranteed the entirety of their depositors. U.S. government regulators, the comproller of the currency or the Fed are going to be licensing and lending legitimacy to these stablecoins. Are they, and in turn the taxpayer going to be on the hook for standing behind these funds if problems arise? I would remind you that in the case of banks, the banks pay into an insurance fund at the FDIC so that if problems arise in principle, the banks pay the price of making the depositors whole up to the insured limit. There is nothing like a deposit insurance fund for stablecoins. Taxpayers will be directly implicated.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“You'll recall there was a big one that broke the buck that was supposed to be holding bonds fully back the claims of people who held money market shares when a dollar money market share went down to 97 cents all kinds of chaos broke out people began to worry about other money market funds and contagion and the government stepped in and guaranteed the value of money market funds so do we want the government to be on the hook for stablecoin redemption, which is a scenario here. Silicon Valley Bank in 2023 had extensive unhedged bond portfolios that lost value when interest rates went up. And again, because of fears that problems in an individual bank would infect large parts of the financial system, the government stepped in.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“But as we know from ample historical experience, a bond with a nominal value of $1 may on occasion trade for less than $1, depending on redemption risk and other things. So banks did not always have the collateral to pay off their noteholders. Different notes there for traded at different prices if there was redemption risk. And when there were serious worries about whether the bank would be able to redeem its notes, there could be a rush to the till, if you will, to the Teller's cage, a banking panic, in other words, and that could spill over from one bank to another. So that gives you an idea of the kind of problems that can arise. So too does the performance of money market funds in 2010.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“Well, most direct historical precedent for this kind of problem would be during the free banking period in the United States from the middle of the 1830s up to the early days of the Civil War when in many states individual banks were free to issue their own proprietary banknotes when they made a loan they would pay out the balance of the loan in the form of those banknotes. They were in principle obliged to redeem a dollar banknote for a dollar's worth of gold, which they held as reserves or alternatively they could hold state government bonds or sometimes state railway bonds as collateral that they could then convert into gold and pay out to whoever ended up with their notes.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“I do worry about a proliferation of burn season quasi-currencies that may not be interoperable and interchangeable and that may end up trading at different prices. So an analogy would be every dollar bill might not be worth a dollar depending on the number imprinted on the front, the Federal Reserve Bank that had happened to issue it. I think there is a lot of history suggesting that private monies, which is what we're talking about here, do not always function perfectly. So what's at risk is what economists refer to as the singleness of money that every dollar bill is worth a dollar so that you don't have to scrutinize it if you're the owner of a coffee shop, you accept it in payment. To scrutinize all kinds of additional costs, inefficiencies and risks can be introduced into the payment system.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“Think the banks that are going to issue their own tokens, those tokens will be converted into USDC or Tether for the other uses. So I think there will be two kinds. There will be the two or three biggest ones in the world, and then there will be much more locally based tokens that are much more easy to deal with.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“Disagree with you slightly on the idea that it's going to be such a huge scale. I think what we currently think of as stablecoins, that market, the crypto native stablecoins, USDC and Tether, those are overwhelmingly likely to be the dominant ones. And these banks that are looking to issue stablecoins, I think they have a very different business in mind. I don't think they're looking to launch a hundred billion dollar market cap stablecoin for people to participate in like global remittances or DeFi protocols. I'd say this because I advise a few of these banks. What these banks are looking to do is to A, lower their funding cost. And if they have people holding stablecoins, there's reasons to think that that can be cheaper than having to hold an actual bank deposit. And B, they're looking to create customer stickiness by having a tool through which they can run discount programs, rewards programs, and other kind of loyalty features. And it's easier to do that with an electronic token.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“Enough about stablecoin custody and private keys and blockchain transmission and those kinds of things to be able to adequately supervise this. And I think the answer is they know more today than they knew yesterday and they'll know more tomorrow than they know today. Banks have accommodated technology developments a lot over the decades, and there's always been a front end where the regulators were playing catch-up. And I think it's a fair comment to say that they're playing catch-up today. But it's better that they start playing catch-up and learning than not, right? And so as national banks start issuing these tokens, exam teams will arise that will scrutinize and learn these things better than they have in the past. And I would note, by the way, it's kind of the same thing with the big audit firms. Virtually none of the big four audit firms would agree to audit a crypto company 10 years ago. But now they all have crypto practices. And it's just because the”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's the only thing happening in the Genius Act was a requirement of a monthly audit. I would say that doesn't make me feel a lot better. That's mostly sort of optics and window dressing. What makes me feel better is that these things have to be issued inside of a bank subsidiary or if it's a non-bank subsidiary, it has to be supervised by a state banking agency. There's a flock to national bank charters right now occasioned by the Genius Act. I mean, lots and lots of companies that are in the crypto space are now applying for national bank charters. National banks are subject to something called continuous supervision. It's the continuous supervision that really matters. That is not a monthly or annual thing. Bank examiners are there all the time and they conduct targeted exams on short notice all the time 365 days a year and at the big banks they're on site 365 days a year so that's where the confidence comes from now your expertise question i think is maybe the bigger concern do we think that bank examiners know”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“Be supervised by a state banking agency subject to a set of specific legislative requirements. And we know what the reserve requirements for stablecoins will be, meaning that if you ever want to convert your stablecoin into fiat currency, you now have the same assurance that the currency will be there as if you were withdrawing from your checking account. That was never the case before. And we know what the permissible assets are that can be used to back these stablecoins. We know where they have to be held. We know how frequently reserve disclosures have to be made. There's just a sense that supervision equals safety. And as a former bank regulator myself, I think there's a lot of value in that. It also makes it much more likely now that the regulatory framework exists, that many, many more issuers will come to market. So right now you really in this country only have one at scale, which is USDC. As soon as you have mass market adoption of this, the monopoly will go away.”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT
“At a high level, for the very first time, you actually have a specific supervisory system for stablecoins that mimics and mirrors the supervisory system for national banks. And the reason that more people have not adopted stablecoins over the past five or ten years is largely that they feel safer at the bank. They can go into a bank branch. They see the FDIC insurance sign. They know that their cash is not at risk. They know if the bank is robbed, their money will still be accessible to them. There's a feeling of safety. And there's been a feeling for the whole existence of crypto that crypto is not like that. We don't really know who we're dealing with. We don't really know what the safety layer looks like, et cetera. So what the Genius Act does is it says, listen, all issuers of stablecoins in the United States will be supervised. They will either be supervised by one of the three national bank regulators or”
2025-09-02 · Goldman Sachs Exchanges · After a Summer of Stablecoins, What’s Next? · IDENTIFIED FROM THE TRANSCRIPT