Coinbase exec: Proposed law already blocks WSJ's stablecoin risk claims

Coinbase Chief Policy Officer Faryar Shirzad has refuted a Wall Street Journal (WSJ) article on the risks of stablecoins. In a post on X, Shirzad argued that while the WSJ characterized stablecoins as risky "private money," approximately 90% of the U.S. M2 money supply is already privately issued. He contended that the key issue is not whether money is public or private, but whether regulations adequately address the risks, a role he says the GENIUS Act fulfills. Shirzad explained that under the GENIUS Act, issuers would be prohibited from lending, using leverage, or engaging in fractional reserve banking, and must maintain 1:1 reserves with cash and short-term Treasury bonds. He stated that the concerns raised by the WSJ—such as loss of principal, yield-chasing behavior, and undermining the unity of the currency—are all blocked by the bill's design. He also dismissed the WSJ's analogy to the Free Banking Era, noting that unlike the speculative state bonds of that period, the GENIUS Act would require issuers to hold highly liquid assets, maintain segregated custody, redeem at par, and provide monthly attestations.