Popular economist and longtime fund manager Peter Schiff resumed bashing the crypto industry on Friday on May 23, this time aiming at stablecoins.
In an X-post, Schiff argued that U.S. dollar-backed stablecoins are economically worthless, as they "won't do anything to help the U.S. economy or finance the U.S. government's exploding deficits."
He said stablecoins are mostly liquidity vehicles in the crypto world, not major tools in the wider financial system. “
The primary use of stablecoins will be as trading pairs with other crypto tokens, mainly Bitcoin,” he wrote. “The main purpose is to draw more money into the crypto casino.”
In answer to those concerns, Congress introduced the Stablecoin Act, which would require stablecoin issuers to maintain full reserves, establish strong licensing rules, and operate under federal oversight.
The comments come at a time when there is renewed discussion in Congress and by regulators about the role of stablecoins, as they consider tighter regulation for the $150 billion industry.
Advocates say that stablecoins pegged to the dollar, like USDT and USDC , can improve payment systems and access to digital finance, particularly in underbanked parts of the world. However, critics like Schiff argue that stablecoins have done little more than stoke speculative trading activity.
However, the U.S. Senate has moved forward with the GENIUS Act — or Guiding and Establishing National Innovation for US Stablecoins Act — with a 66-32 vote to advance it on May 19. The bipartisan bill seeks to regulate stablecoins by requiring full reserves and audits and restricting uncollateralized algorithmic stablecoins.
Veteran fund manager has harsh words for stablecoins first appeared on TheStreet on May 23, 2025