• Steve Mnuchin on Tether: Stablecoins Must Be Backed by Dollars Held in a Bank, Not Casino Chips

  • Steve Mnuchin, the former Secretary of the Treasury who is now the founder of the Liberty Strategic Capital private equity fund, spoke to Bloomberg TV about stablecoins, specifically Tether.

    Mnuchin’s fund prefers blockchain and stablecoin payments.

    In response to Bloomberg TV host David Westin’s questions, the former US Treasury Secretary stated that his new fund, Liberty Strategic Capital, is focused on technology—cybersecurity, national security, privacy, and fintech.

    When asked to identify investment opportunities in the payments industry, Mnuchin specifically stated, “we like the payments space.” He stated that the most promising opportunities in this area are in real-time cross-border payments. Mnuchin then brought up the topic of blockchain-based stablecoins.

    Mnuchin believes that stablecoins should be regulated. They should be easily transferable, which means they should be backed by real US dollars held in a secure custodian bank.

    Tether has 68 billion USDT in circulation, according to Mnuchin.

    Mnuchin also spoke about stablecoins, specifically Tether. The Bloomberg TV host stated that, according to a Bloomberg article published earlier today, Tether has over $68 billion USDT, with $48 billion of that issued in 2021, seemingly doubting Tether’s ability to hold that much cash anywhere.

    Stablecoins, according to Mnuchin, must not be “like casino chips.” People should always be able to exchange their dollar-backed stablecoins for real US dollars at any time. And the dollars used to back stablecoins must be kept in a trust account at a regulated bank.

    According to the former US Treasury Secretary, stablecoins should be invested in the US Treasury or something “that looks like US Treasuries”—that is, money markets of highly liquid investments.

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