Do Stablecoins Have Practical Use Cases? This Nobel Laureate Doesn’t Think So

• While stablecoins are gaining extreme popularity across the globe, Paul Krugman thinks their only real use case is to support financial crimes
• The Nobel Laureate says doallr-backed tokens are not suitable for real-world applications like ordinary purchases

The stablecoin market has grown exponentially since the inception of asset-backed cryptocurrencies. Their current market cap is over $251 billion, amounting to 7.63% of the total crypto market capitalization. Top stablecoins like USDT and USDC are used by billions of crypto users all over the world. 

The increased popularity and usage of these tokens have made it mandatory for governments to regulate them. Donald Trump’s Presidency has already started moving forward several bills, such as the STABLE Act and the GENIUS Act, to regulate stablecoins in the country.

Meanwhile, a Nobel award winner in Economics is saying that stablecoins have no practical use cases. This is sending waves across the crypto industry at a time when the whole community believes these tokens hold immense potential. 

Paul Krugman Believes Stablecoins Have No Practical Use

Paul Krugman, who received the Nobel Prize in Economics in 2008, posted a Substack blog post recently on stablecoins. In his blog post titled “Digital Corruption Takes Over DC,” Paul Krugman said that stablecoins do not have any useful function. 

Krugman compared all the activities one can do with these dollar-backed tokens with the payments made by fiat currencies using debit cards, Venmo, Zelle, wire transfers, etc. And he said all the fund transfers done using these crypto tokens can also be done in these traditional methods with less cost. The Nobel Laureate also made some bold statements, such as, 

“Unless there’s a sudden outbreak of conscience and rationality on Capitol Hill, Congress is about to pass, with (alas) wide bipartisan support, the GENIUS ACT, which will legitimize and normalize stablecoins.”

Furthermore, Paul Krugman also questioned the audience why they do not use dollars directly instead of using dollar-backed crypto tokens. The only difference he found between dollars and stablecoins is anonymity. Thus, Krugman finally concluded that these crypto tokens are only useful for financial criminal activity with their anonymous nature. 

CoinMetrics Co-founder Disagrees

Nic Carter, CoinMetrics co-founder, took to the social platform X and shared a clip from Krugman’s blog post. He condemned the opinions of Paul Krugman about stablecoins and said,

“For a Nobel-winning economist, he is remarkably misinformed about the subject matter.”

Furthermore, Nic Carter shared the statistics of an increase in stablecoin usage for different purposes, such as P2P, B2B, Card, B2C, and Prefunding payment transfers over the last couple of years. He even said more than 100 million people who use stablecoins disagree with Krugman. 

On the other hand, the stablecoin crypto bills gained momentum in the US Senate recently, pushing their adoption. Official leaders such as Donald Trump and David Sacks mentioned stablecoins multiple times in the media. They even expressed their belief in these tokens to increase dollar dominance across the globe. 

The question remains: Do stablecoins have practical use cases? We might need to wait and see how the global financial landscape shifts in the next few years to answer that question. 

Highlighted Crypto News Today: 

Meta Shareholders Reject Proposal to Add Bitcoin to Treasury