“Even if there's one thing, no other people have any friends.”
– Aesop's F story
It waned when President Reagan announced the Strategic Defense Initiative (SDI) at a televised address from his oval office.
Scientists explained that 1980s technology would simply not be possible to use lasers and particle beams to remove Soviet missiles from space.
The press has changed the ironic name to his plan “Star Wars.” Jedi Return.
Only one constituency adopted it as seriously as President Reagan. Soviet.
Soviet scientists doubted that their American counterparts would pull it off. But they couldn't rule it out either, and the Kremlin wasn't happy they might do so.
The Soviets saw Reagan's plan as an existential threat, which forced them to the negotiation table.
“SDI is an important reason why the Soviets are willing to negotiate cuts to attack weapons,” the US Secretary of State at the time said.
Taking SDI seriously, the Soviets changed Reagan's idea from sci-fi daydream to political reality.
“If Russians remain vigilant about SDI,” modern research concluded that “it would become politically impossible for Congress to vote for it.”
In other words, the magnitude of Russia's response to SDI made SDI more reliable to Americans.
It's possible that something similar is happening in Stablecoins now.
In support of the genius law, President Trump has promised that “stablecoins will play a key role in ensuring the continued global domination of the US dollar as a global reserve currency.”
Just as the sentiment became common, there are reasons for skepticism. The dollar is the world's reserve currency for America's deep capital markets, predictable rule of law, independent central banks and trusted institutions.
If the world loses faith in these things, even the demand for US debt will not bring the dollar to a long time.
But Europe responded to genius as if Europe were not only a lifeline of the dollar, but an existential threat to the euro.
last week, Financial Times As the Genius Act makes Stablecoins even more intimidating, EU officials are now reporting that they will “rethink their digital euro plans.”
Specifically, EU officials “we are considering operating the digital euro on public blockchains such as Ethereum and Solana rather than private.”
That's not a small change for Europe. Some countries limit cash transactions to just 1,000 euros, but few oppose the concept of CBDC and law enforcement.
But now is it going to put their sovereign currency in Solana? Mix with Memecoins???
Europe must Really Please worry.
One ECB official recently warned that “without a strategic response” Stablecoins could undermine the European banking system, threaten its economic stability and even lead to “geopolitical dependencies.”
(Note to Europe: Can we call this strategic response the Stablecoin Defense Initiative?
Christine Lagarde, the ECB's most senior official, warned that if Stablecoins were not checked, “Central banks will have a hard time impacting the economy through monetary policy.”
If we still need evidence of the power of blockchain, I think we have it now.
Blockchain-based dollars tie the EU to the knot, and financial officials are trying to find enough digital euros for people to use it in place of stubcoins that the dollar has been expelled, but it's not as good as using it in place of bank deposits.
It's a more difficult needle than hitting an incoming missile with a laser beam from an orbiting satellite.
The EU's CBDC plan is half-hearted, including ways to limit how it is used, and its stable law is similarly hedged, requiring the issuer to hold deposits in the bank.
Economist Luis Galicano says the less-than-good digital euro is a “unusual design problem” that leaves the ECB at “No Man's Land.”
He characterizes the central bank's position as “We are scared of stupid things, but we don't want to give CBDC any major advantages.”
This seems unlikely to end well. With half-stub coins, half-CBDCs risk the fate of esoprapra bats – they'll never be of any use to anyone by trying to be everything for everyone.
But is it right for Europe to worry about that?
President Trump's claim that stubcoin would significantly expand control of the dollar sounds less plausible than Reagan's claims about SDI.
At the time, scientists were proven right. Reagan's lasers and particle beams were science fiction.
Even today, 40 years from now, President Trump's plans for the Golden Dome are less feasible.
