Keiser Says Stablecoin Issuers Buy BTC For Free

By: bitcoin ethereum news|2025/05/09 02:00:07
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Welcome to the US Crypto News Morning Briefing—your essential rundown of the most important developments in crypto for the day ahead. Grab a coffee as we discuss the growing influence of stablecoin issuers in the US Treasury market. With growing institutional adoption and regulatory legitimization of US dollar-pegged stablecoins, experts warn of artificial inflation of demand for the dollar. Crypto News of the Day: Using Government Debt Instruments To Back Digital Dollars is Risky, Keiser Warns The influence of stablecoin issuers in the US is growing, so much that Tether, which already issues the USDT stablecoin, plans to launch a US-only stablecoin by 2025. Tether aims to position stablecoins as strategic financial tools under the Trump administration. This chart shows Tether’s dominance in the stablecoin market, with overall supply going from $2 billion to more than $200 billion in recent years. Meanwhile, the US Treasury projects stablecoins could reach a $2 trillion market by 2028, which could attract more players. Nevertheless, as stablecoin influence in the Treasury market grows, the House Financial Services Committee is concerned. BeInCrypto reported lawmakers questioning US Treasury Secretary Scott Bessent about Trump-affiliated World Liberty Financial (WLFI) and its new USD1 stablecoin. Perhaps, however, the greater concern is stablecoin issuers’ using Treasury yields to buy Bitcoin. According to experts, this could undermine US government reserves. A recent US Crypto News publication indicated reports of stablecoin issuers using Treasury yields to buy Bitcoin. Some say this could undermine initiatives like the proposed US Strategic Bitcoin Reserve, which aims to bolster national holdings of the pioneer crypto. Growing Influence of Stablecoin Issuers in US Treasuries Market is Concerning, Max Keiser Says Among them is Bitcoin pioneer Max Keiser, who voiced concerns over the growing influence of stablecoin issuers in the US Treasury market. Keiser warns that their use of government debt instruments to back digital dollars may have broader implications for the global financial system. As of Q1 2025, Tether reported holding nearly $120 billion in short-term US Treasury securities and reverse repos. This makes it one of the largest non-sovereign holders of American government debt. Meanwhile, Circle, issuer of USDC, disclosed more than $22 billion in Treasury bills in a February 2025 attestation. These holdings collateralize dollar-pegged stablecoins, helping issuers maintain liquidity and trust. The issuers benefit from the interest income generated by the bonds. While this practice is common and legal, Keiser contends it contributes to deeper systemic issues tied to fiat currency dynamics. “This is exactly why the stablecoin issuers are buying Bitcoin, this is called a speculative attack on the US dollar. Feeding the debt spiral with fiat stablecoins, buying treasury bills, and then investing the interest into Bitcoin, allowing the stablecoin issuers to buy billions in Bitcoin for free,” Keiser told BeInCrypto. Stablecoin issuers purchase US debt on secondary markets and earn interest, which they may or may not deploy into digital assets like Bitcoin. Keiser is critical of the broader financial architecture underpinning stablecoins. “Issuing new stablecoins backed by US T-bills printed out of thin air is not a monetary system, but a financial hologram,” he said. US Treasury bills are debt instruments issued by the federal government and sold to investors, including private companies like Tether and Circle, through regulated markets. These stablecoin issuers tokenize existing fiat currency held in reserve. Keiser elaborated on what he sees as the long-term consequences of this model. “It’s a speculative attack by private banks. It is financial repression, pushing rates down as ‘malinvestments’ increase. It is rinse and repeat,” he explained. His critique also extends to the broader outlook for the US dollar, which, according to the Bitcoin pioneer, “is a quick, deadly fix; a USD hospice. Cue the final death throes of the US dollar.” BeInCrypto has contacted Circle and Tether for comment and will update this article if they respond. Max Keiser Proposes AI To Invent Novel Security Structures Keiser also highlighted what he views as an emerging trend. He said high-profile investors and technologists use artificial intelligence (AI) and novel corporate strategies to increase Bitcoin exposure. The Bitcoin maxi referenced Strategy Executive Chair Michael Saylor and investor-turned-politician Vivek Ramaswamy. “Financial engineers like Michael Saylor and Vivek Ramaswamy are using AI to invent novel security structures to maximize the Bitcoin Treasury model. Vivek Ramaswamy plans to take his company, Strive Asset Management, public by merging with Asset Entities and starting to accumulate Bitcoin using the model that Saylor’s Strategy has already successfully adopted — using proceeds from stock and debt issuance,” Keiser remarked. Though no confirmed public filings detailing Ramaswamy’s use of AI in this context, Keiser sees these developments as significant. “The results are redefining finance globally and adding significantly to the Bitcoin demand. OG’s like myself, who have watched Bitcoin outperform everything for 15 years, are seeing, for the first time, investment strategies that are outperforming Bitcoin, and the implications are profound,” he said Keiser believes such strategies could push Bitcoin’s market value even higher. He also implied that the extraordinary compounding rates of the past could be extended. This sentiment comes as Bitcoin captures more of the total addressable market and scales even higher price points. The views expressed are those of Max Keiser and do not necessarily reflect the opinions of BeInCrypto. Chart of the Day This chart shows that stablecoins have become a large holder in US treasuries. Byte-Sized Alpha Here’s a summary of more US crypto news to follow today: Bitcoin faces heightened volatility as US-China trade talks in Switzerland risk failing, potentially triggering sharp price swings. OCC confirms banks can buy, sell, and hold crypto assets at customer request. Services include trade execution, recordkeeping, valuation, and tax reporting. Standard Chartered predicts Bitcoin could surpass its all-time high soon, driven by surging ETF inflows and capital movement. Bitcoin has seen over $1 billion in daily inflows, signaling strong demand and potentially paving the way for a price surge toward $105,000. Bitcoin spot ETFs saw major inflows and outflows this week, driven by investor reactions to macroeconomic shifts and the Fed’s rate decision. Solana launchpad Pump.fun surged past Tron with $2 million in daily revenue, ranking third globally behind only Tether and Circle, per DefiLlama. Ethereum’s Pectra upgrade has triggered a surge in network activity, lowering the circulating supply to an 18-day low of 120.69 million ETH. Crypto Equities Pre-Market Overview Disclaimer In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated. Source: https://beincrypto.com/max-keiser-stablecoin-issuers-free-bitcoin-us-crypto-newws/

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Before using Musk's "Western WeChat" X Chat, you need to understand these three questions

The X Chat will be available for download on the App Store this Friday. The media has already covered the feature list, including self-destructing messages, screenshot prevention, 481-person group chats, Grok integration, and registration without a phone number, positioning it as the "Western WeChat." However, there are three questions that have hardly been addressed in any reports.


There is a sentence on X's official help page that is still hanging there: "If malicious insiders or X itself cause encrypted conversations to be exposed through legal processes, both the sender and receiver will be completely unaware."


Question One: Is this encryption the same as Signal's encryption?


No. The difference lies in where the keys are stored.


In Signal's end-to-end encryption, the keys never leave your device. X, the court, or any external party does not hold your keys. Signal's servers have nothing to decrypt your messages; even if they were subpoenaed, they could only provide registration timestamps and last connection times, as evidenced by past subpoena records.


X Chat uses the Juicebox protocol. This solution divides the key into three parts, each stored on three servers operated by X. When recovering the key with a PIN code, the system retrieves these three shards from X's servers and recombines them. No matter how complex the PIN code is, X is the actual custodian of the key, not the user.


This is the technical background of the "help page sentence": because the key is on X's servers, X has the ability to respond to legal processes without the user's knowledge. Signal does not have this capability, not because of policy, but because it simply does not have the key.


The following illustration compares the security mechanisms of Signal, WhatsApp, Telegram, and X Chat along six dimensions. X Chat is the only one of the four where the platform holds the key and the only one without Forward Secrecy.


The significance of Forward Secrecy is that even if a key is compromised at a certain point in time, historical messages cannot be decrypted because each message has a unique key. Signal's Double Ratchet protocol automatically updates the key after each message, a mechanism lacking in X Chat.


After analyzing the X Chat architecture in June 2025, Johns Hopkins University cryptology professor Matthew Green commented, "If we judge XChat as an end-to-end encryption scheme, this seems like a pretty game-over type of vulnerability." He later added, "I would not trust this any more than I trust current unencrypted DMs."


From a September 2025 TechCrunch report to being live in April 2026, this architecture saw no changes.


In a February 9, 2026 tweet, Musk pledged to undergo rigorous security tests of X Chat before its launch on X Chat and to open source all the code.



As of the April 17 launch date, no independent third-party audit has been completed, there is no official code repository on GitHub, the App Store's privacy label reveals X Chat collects five or more categories of data including location, contact info, and search history, directly contradicting the marketing claim of "No Ads, No Trackers."


Issue 2: Does Grok know what you're messaging in private?


Not continuous monitoring, but a clear access point.


For every message on X Chat, users can long-press and select "Ask Grok." When this button is clicked, the message is delivered to Grok in plaintext, transitioning from encrypted to unencrypted at this stage.


This design is not a vulnerability but a feature. However, X Chat's privacy policy does not state whether this plaintext data will be used for Grok's model training or if Grok will store this conversation content. By actively clicking "Ask Grok," users are voluntarily removing the encryption protection of that message.


There is also a structural issue: How quickly will this button shift from an "optional feature" to a "default habit"? The higher the quality of Grok's replies, the more frequently users will rely on it, leading to an increase in the proportion of messages flowing out of encryption protection. The actual encryption strength of X Chat, in the long run, depends not only on the design of the Juicebox protocol but also on the frequency of user clicks on "Ask Grok."


Issue 3: Why is there no Android version?


X Chat's initial release only supports iOS, with the Android version simply stating "coming soon" without a timeline.


In the global smartphone market, Android holds about 73%, while iOS holds about 27% (IDC/Statista, 2025). Of WhatsApp's 3.14 billion monthly active users, 73% are on Android (according to Demand Sage). In India, WhatsApp covers 854 million users, with over 95% Android penetration. In Brazil, there are 148 million users, with 81% on Android, and in Indonesia, there are 112 million users, with 87% on Android.



WhatsApp's dominance in the global communication market is built on Android. Signal, with a monthly active user base of around 85 million, also relies mainly on privacy-conscious users in Android-dominant countries.


X Chat circumvented this battlefield, with two possible interpretations. One is technical debt; X Chat is built with Rust, and achieving cross-platform support is not easy, so prioritizing iOS may be an engineering constraint. The other is a strategic choice; with iOS holding a market share of nearly 55% in the U.S., X's core user base being in the U.S., prioritizing iOS means focusing on their core user base rather than engaging in direct competition with Android-dominated emerging markets and WhatsApp.


These two interpretations are not mutually exclusive, leading to the same result: X Chat's debut saw it willingly forfeit 73% of the global smartphone user base.


Elon Musk's "Super App"


This matter has been described by some: X Chat, along with X Money and Grok, forms a trifecta creating a closed-loop data system parallel to the existing infrastructure, similar in concept to the WeChat ecosystem. This assessment is not new, but with X Chat's launch, it's worth revisiting the schematic.



X Chat generates communication metadata, including information on who is talking to whom, for how long, and how frequently. This data flows into X's identity system. Part of the message content goes through the Ask Grok feature and enters Grok's processing chain. Financial transactions are handled by X Money: external public testing was completed in March, opening to the public in April, enabling fiat peer-to-peer transfers via Visa Direct. A senior Fireblocks executive confirmed plans for cryptocurrency payments to go live by the end of the year, holding money transmitter licenses in over 40 U.S. states currently.


Every WeChat feature operates within China's regulatory framework. Musk's system operates within Western regulatory frameworks, but he also serves as the head of the Department of Government Efficiency (DOGE). This is not a WeChat replica; it is a reenactment of the same logic under different political conditions.


The difference is that WeChat has never explicitly claimed to be "end-to-end encrypted" on its main interface, whereas X Chat does. "End-to-end encryption" in user perception means that no one, not even the platform, can see your messages. X Chat's architectural design does not meet this user expectation, but it uses this term.


X Chat consolidates the three data lines of "who this person is, who they are talking to, and where their money comes from and goes to" in one company's hands.


The help page sentence has never been just technical instructions.


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