Hey everyone! 👋 Have you ever heard about ‘stablecoins’? Don’t worry if you haven’t! Today, we’re going to explore a new plan from the United States called the GENIUS Act. Is it really genius, or could it be risky? Let’s find out together!
So, let’s start with some basics. We all know that money is what we use to buy things, right? 💰 In the world, different countries have different money, like dollars, euros, or yen. The US dollar is one of the most important currencies around the globe.
But recently, the US has come up with a new idea called the GENIUS Act. It’s a plan to create something called ‘stablecoins.’ But what are stablecoins?
Stablecoins are a type of digital money, kind of like how you might have coins in a video game 🕹️. Unlike other digital coins, stablecoins are designed to have a stable value, usually linked to something real, like US Treasury bonds (these are like IOUs from the US government).
Under the GENIUS Act, private companies can create stablecoins that are backed by US Treasury bonds. That means they promise that each stablecoin is worth a certain amount because it’s supported by these bonds.
Sounds cool, right? Digital money that’s stable and easy to use! But some experts are worried 🤔. They think this plan might bring risks not just to the US, but to other countries too.
Here’s why: if lots of people around the world start using these stablecoins, it could create a big, complicated money system that’s hard to control. If something goes wrong, it might affect people everywhere, not just in the US.
Imagine if everyone in your school started using a new kind of playground money. At first, it might be fun. But what if the person in charge of the playground money loses it or changes the rules? Then everyone could be in trouble!
Some countries might think it’s safer to use their own money instead of depending on the US dollar and these new stablecoins. This is called ‘dedollarization,’ which means relying less on the US dollar.
In the end, while the GENIUS Act could bring some exciting changes, it’s important to think about how it might affect everyone. It’s like trying a new game—it’s fun, but we need to make sure it’s safe to play.
So, what do you think? Is the GENIUS Act a genius idea, or could it be a problem? Let us know your thoughts! 💭
Reference(s):
cgtn.com
