Can you do fractional reserve banking with stablecoins where you lend out the underlying dollars to people and don't have full reserves? That's what makes banking tricky. When there are a surge of loan defaults across the banking system the money supply shrinks rapidly unless the government bails them out. Thus, the need for regulation.
One reason the U.S government has to like stablecoins is because Tether is one of the biggest buyers of U.S treasuries that they use to back their stablecoins.
One reason the U.S government has to like stablecoins is because Tether is one of the biggest buyers of U.S treasuries that they use to back their stablecoins.