Then look at the risks with Brookings. If panic sets in and everyone wants to exchange their stablecoins back into real dollars at the same time, issuers will have to flood the market with Treasury bills… Treasury prices will collapse, interest rates will explode, and you one nothing. This is precisely the scenario that Eichengreen, Brookings, and even the Fed are warning about. The GENIUS Act doesn't really solve this – it only postpones it.

This is what would happen if it occurs. Let's call it a "stablecoin run":

Phase 1: The trigger. Something shakes confidence. For example:

A major issuer like Tether/Circle allegedly doesn't have 100% backing.

A major hack. This is precisely the scenario that Eichengreen, Brookings, and even the Fed are warning about. The GENIUS Act doesn't really solve this – it only postpones it.

This is what would happen if it occurs. Let's call it a "stablecoin run":

Phase 1: The trigger. Something shakes confidence. For example:

A major issuer like Tether/Circle allegedly doesn't have 100% backing.

A major hack, a stablecoin depreciates to $0.97.

Or a geopolitical shock: war, Trump freezes wallets.

People think: Better to have real dollars in their bank account than tokens.

Phase 2: The bank run, only digital and 100x faster. At a normal bank, a run takes days. With stablecoins, it happens in minutes, 24/7, globally, at the push of a button to "redeem."

Day 1: $20 billion redemption.

Issuers have to sell their reserves immediately: T-bills, repos. By law, they are only allowed to hold short-term securities—precisely those that are the heart of the financial system.

So they dump $20 billion of T-bills on the market.

Phase 3: Treasury prices collapse, interest rates explode. T-bills are usually highly liquid. But when several large issuers sell simultaneously, there are too few buyers. ... What happens:

The price of Treasury bills falls -> yield rises sharply from, for example, 4.5% to 7-8%

This pulls up all other interest rates: mortgages, corporate loans, government financing

Just like the UK gilt crisis in 2022, when Liz Truss almost brought down the British pension system, only this time on a global scale

Eichengreen put it this way: "If panicked customers force stablecoin issuers to sell treasuries, Treasury prices could collapse"

Phase 4: The feedback loop

Interest rates rise -> stocks crash -> even more people sell crypto -> even more stablecoin redemptions

Money market funds that also hold Treasury bills also experience outflows

In the end, the Fed has to step in, as in March 2020, and say: We'll buy all Treasury bills without limit

And that's precisely the final twist to your question about debt relief:

If the Fed intervenes, the The GENIUS Act failed and simultaneously achieved its goal.

Failed because "private money" will ultimately have to be bailed out by taxpayers. Achieved because the Fed is currently printing trillions of Treasuries and paying out stablecoin holders with fresh Fed money. This would effectively mean that the debts of stablecoin issuers become the debts of the Fed. Debt relief occurs through monetization.

For the average holder, this means:

Your stablecoin on your phone will be unredeemable for 1-2 days because the issuer is taking a break.

Afterwards, you'll receive your dollars, but the dollars will already have 5-10% less purchasing power because the Fed has just intervened.

This is why the Act requires large issuers (over $10 billion) to be under federal oversight and to demonstrate monthly reserves. However, there is no prohibition against everyone selling at the same time.

The real safeguard in the Act: In the event of bankruptcy, stablecoin holders are paid before all other creditors. This is reassuring, but it doesn't solve the market price problem. If this run really happens, it will unfold in three waves. This is no longer a theoretical scenario; we've already seen similar developments on a smaller scale in 2020, 2022 in the UK, and 2023 with US banks.

WAVE 1: The first 72 hours - Liquidity crash

Stablecoins de-pegging: USDT at 0.96, USDC at 0.98. Panic is spreading on X; everyone wants out.

Crypto exchanges are halting withdrawals because they don't have any dollars. Just like FTX, only systemic.

T-bill market freezes: Yields jump from 4.5% to 7-8% in a single day. This is the signal for the entire world—US Treasury bonds are suddenly no longer liquid.

The Fed calls an emergency meeting, like in March 2020. It has to decide: Do I let issuers go bankrupt or do I bail them out?

It will bail us out. Always. Because otherwise, the entire dollar payment system abroad will collapse. That's the dollar hegemon trap.

The Fed announces: "Standing facility - we will buy all T-bills of the Permitted Issuers at face value, without limit."

WAVE 2: The next 3-6 months - The political reset

This is the moment for your UBI theme. Why?

Because after a bailout, nobody trusts private money anymore. A stablecoin depreciates to $0.97.

Or a geopolitical shock: war, Trump freezes wallets.

People think: Better to have real dollars in a bank account now than tokens.

Phase 2: The bank run, only digital and 100x faster. At a normal bank, a run takes days. At St