MONDAY, MARCH 7 , 2022. THE WASHINGTON POST EZ RE A
BY NELLIE LIANGA
relatively new class of digital assets
known as “stablecoins” has the
potential to offer Americans a
cheaper, more efficient way of
making purchases and payments. And the
market for these digital assets is booming:
The current market capitalization of sta-
blecoins is approximately $180 billion, up
from just $5 billion at the start of 2020, and
they account for roughly 10 percent of the
value of all digital assets, which include
cryptocurrencies.
But stablecoins are not yet subject to
consistent regulatory safeguards — mean-
ing they pose an elevated risk to consumers
and might even threaten the stability of the
financial system.
Unlike other digital assets, which often
fluctuate dramatically in price, stable-
coins are intended to be what their name
implies: stable. Many are pegged to the
U.S. dollar, meaning each coin is suppos-
edly backed by a dollar in cash, Treasury
securities or other safe assets, and thus
redeemable on demand.
Today, stablecoins are mostly used to
facilitate the trading of other, more volatile
digital assets, such as bitcoin. But compa-
nies around the world are working to create
stablecoins that businesses and households
can use to make payments — which in turn
could help make the payment system faster,
more resilient and more inclusive. For
instance, paying with stablecoin could re-
duce the costs and delays involved in send-
ing and receiving remittances. But stable-
coins also pose major risks — risks that
would be best addressed by new legislation.
Ironically, it is the expectation that sta-
blecoins will maintain a constant value that
could make them dangerous during peri-
ods of stress. If at some point holders of
stablecoins worry they won’t be able to
convert their stablecoins into dollars, they
might try to cash out quickly — perhaps a
few owners at first, then many more, and
soon there could be a widespread run on
the coin. To satisfy demand, issuers would
have to sell the assets backing their coins.
That could result in a fire sale of tradition-
ally safe securities that would harm critical
parts of the financial system.
This isn’t hypothetical. History is rife
with runs on financial institutions, includ-
ing the run on banks that preceded the
Great Depression. In 2007 and 2008, runs
on “shadow banks” — companies that per-
form banklike activities without being sub-
ject to bank oversight — helped fuel a crisis
that engulfed the United States and much
of the world.
Given their potential use for payments,
stablecoins present another concern. Pay-
ment instruments such as checks and cred-
it cards are the lifeblood of the economy. If
stablecoins replace those systems to a sig-
nificant degree, disruptions related to digi-
tal wallets or other mechanisms support-
ing the use of stablecoins for payments
could have devastating effects.
Then there are risks related to the possi-
ble links between stablecoin issuers and
large retailers or other commercial busi-
nesses. For almost a century, U.S. law has
prevented commercial companies from
controlling banks — a wise approach, as too
much economic power concentrated in one
place can limit competition and harm con-
sumers. But today, nothing prevents com-
mercial companies from creating and issu-
ing stablecoins.
The Treasury Department and U.S. fi-
nancial regulators are prepared to use the
tools we have to protect consumers from
these potential risks, and know that many
state regulators are working to do the same.
But we urge Congress to enact legislation to
ensure that stablecoins are subject to ap-
propriate, comprehensive regulation.
Last year, the President’s Working Group
on Financial Markets (PWG) joined the
Office of the Comptroller of the Currency
and the Federal Deposit Insurance Corpo-
ration to produce a report including recom-
mendations for congressional action.
Specifically, the PWG recommended leg-
islation requiring stablecoin issuers to ob-
tain a bank charter, which would ensure
they are subject to prudential standards
that reduce the risk of a run, and which
would prevent a stablecoin issuer from
being controlled by a commercial company.
Recognizing that the use of stablecoins
for payments is likely to depend on digital
wallets and other services, the PWG rec-
ommended that wallet providers be sub-
ject to federal oversight. Federal supervi-
sors should be able to require any entity
providing services critical to the function
of a stablecoin to meet appropriate risk-
management standards.
Finally, to address concerns about the
concentration of economic power, the PWG
recommended that Congress consider
whether other protections — such as data
privacy standards or affiliation limits for
wallet providers — are necessary to protect
consumers.
We know the dangers of risky financial
products. Fifteen years ago, they helped
ignite the deepest recession since the Great
Depression, and nobody wants to see a
replay.
Stablecoins that are well-designed and
appropriately regulated could deliver im-
portant benefits for our payments system.
But guardrails to ensure responsible use
and innovation are essential — and Con-
gress must act quickly to help ensure that
these risks do not harm consumers and the
broader economy.
The writer is the undersecretary for domestic
finance at the Treasury Department.
‘Stablecoins’
are far from
risk-free
cryptocurrency
The outpouring of admiration for
President Volodymyr Zelensky
and the bravery of the Ukrainian
people is rooted in healthy im-
pulses. In overwhelming numbers, Ameri-
cans recognize authentic virtue when we
see it and understand that this struggle
really is about freedom, democracy and
justice.
But beneath our appreciation for a
nobly embattled foreign leader lurks a
form of avoidance, a wish that we might
redeem our own democracy vicariously
without facing up to our division, polar-
ization and decay. We come together
behind Zelensky partly because we can
unite on little else.
At our most optimistic, we might
imagine that Vladimir Putin’s aggression
has, at long last, unleashed a come-to-de-
mocracy moment.
This is already underway in Europe,
where leaders of nationalist parties who
once heaped praise on Putin are fleeing
him in embarrassment. In France, the
National Rally Party of far-right presi-
dential candidate Marine Le Pen has
ordered its organizers to throw away
1.2 million pamphlets that featured Le
Pen shaking hands with Putin. With
French voting starting April 10, she
doesn’t have a lot of time for her Putin
cleansing operation.
In the United States, we can be grateful
that Ukraine’s cause draws support across
the political spectrum. Witness the ap-
plause when President Biden denounced
Putin and embraced Zelensky and the
Ukrainian people in his State of the Union
speech. Especially well-received: Biden’s
invocation of Zelensky’s promise that
“light will win over darkness.”
That’s what friends of democracy are
hoping for in the long run, despite
Russia’s overwhelming advantage in fire-
power. But Zelensky should not be used as
a source of cheap grace. We cannot ignore
the shadows that have fallen across Amer-
ican democracy, cast largely by the power
of an increasingly antidemocratic far right
in the Republican Party.
With admirable exceptions such as
Sen. Mitt Romney of Utah and Rep. Liz
Cheney of Wyoming, Republicans have
been very slow in coming to terms with
the depth of Putinization that Donald
Trump bred in their party. The former
president will now forever be remem-
bered as the man whose initial reaction to
Putin’s invasion of Ukraine was to call it
an act of “genius.”
I suppose it’s a good sign that former
vice president Mike Pence — very, very
belatedly — now says “there is no room in
this party for apologists for Putin.” But
Republicans largely sidestep Trump and
ignore the many ways he undermined
Zelensky while in office. Their preferred
path, reflected in the reply of Iowa
Gov. Kim Reynolds (R) to Biden’s State of
the Union address, is to blame Putin’s
aggression on Biden’s “weakness on the
world stage” and to characterize Biden’s
foreign policy as “too little, too late.”
Reynolds’s speech reflected a central
current in the GOP — to get on the right
side of popular sentiment in favor of
Ukraine without cutting ties to Trump,
and without giving Biden any credit for his
work in corralling a broad global coalition
against Russia’s imperial adventure.
The Biden speech to which Reynolds
responded was resolutely nonpartisan
about Ukraine — and a lot of other
matters, too. Couldn’t Republicans shelve
their reflexive hostility toward Biden for
at least the initial spell of the Ukraine
crisis? This is what Democrats did after
the attacks of Sept. 11, 2001.
But we now seem incapable of recogniz-
ing common ground, even where it exists.
A revealing episode: Florida Gov. Ron
DeSantis (R) chose the moment when
Biden is moving to loosen masking rules
to issue a rude reprimand to a group of
high school students last week for wearing
masks and engaging in what DeSantis
called “covid theater.”
DeSantis may think it’s okay to beat up
on teenagers to make a political point.
Well, he made a point all right: He showed
how destructive and self-serving it has
been for politicians like himself to politi-
cize masking and vaccine requirements.
And until Putin discredited himself
entirely with his Ukraine aggression, the
Russian leader had successfully weap-
onized social divisions among Western
democracies to make their politics even
more dysfunctional. He built a following
by casting himself as a foe of permissive-
ness, feminism, LGBTQ activists, secular-
ists and diversity advocates. The more he
aggravated feelings around these issues —
in alliance with politicians who had an
interest in driving wedges — the weaker
he made the democracies.
With his criminal assault on Ukraine,
Putin has reminded the world of where
nationalist authoritarianism can lead and
how costly a smash-mouth brand of
politics that accentuates and exaggerates
our differences can be. At the same time,
the courage shown by Zelensky and his
fellow Ukrainians in standing up to
brutality should give heart to all defend-
ers of democracy and self-rule.
But Zelensky can’t save anyone else’s
democracy. We have to do this ourselves.
Perhaps this terrible episode will help us
recognize that our shared commitment to
democracy runs a lot deeper than we
thought. We need to come together to
fight for it — starting at home.E.J. DIONNE JR.A come-to-democracymoment?It’s up to us.In 2018, as Saudi Crown Prince Mo-
hammed bin Salman embarked on
a cross-country, getting-to-know-
you tour of the United States, Saudi
journalist Jamal Khashoggi sent me a
warning on WhatsApp: “I think Ameri-
ca is brainwashed.”
The idea behind the visit — during
which MBS, as the crown prince is
known, met with everyone from Presi-
dent Donald Trump to Oprah Winfrey,
with stops at media outlets, including
The Post — was to present MBS as the
modern, youthful face of reform in
Saudi Arabia. But as he smiled for the
cameras and dined in the Hollywood
hills, Saudi Arabia was jailing critics,
had started a destabilizing spat with
Qatar and was bombing Yemen.
Seven months later, Jamal was mur-
dered by a Saudi hit squad in Istanbul.
MBS was swiftly condemned and
ostracized — but something told me
this wouldn’t last long.
Now we have proof.
Washington media has a long history
of cooking up overbaked puff pieces on
murderous autocrats — especially
when those autocrats are key U.S. allies.
The Atlantic’s April cover story, “Abso-
lute Power,” about MBS — which was
written by Graeme Wood and included
interviews conducted along with the
magazine’s editor in chief, Jeffrey Gold-
berg — is part of this tradition, a case
study in everything that is wrong with
access journalism and the immoral fix-
ation on powerful, brutal men.
Early in the article, Wood performs
intellectual gymnastics to try to justify
the lengthy whitewashing to come.
“I’ve been traveling to Saudi Arabia
over the past three years, trying to
understand if the crown prince is a
killer, a reformer, or both,” Wood writes.
The piece checks all the boxes of
everything wrong with so much jour-
nalism about Saudi Arabia under
MBS. There are the attempts to make
MBS relatable (“The crown prince was
charming, warm, informal, and intelli-
gent”; “he eats breakfast every day
with his kids”). We learn insightful
details such as how he prefers “Gameof Thrones” (a show with a heavy doses
of palace intrigue and medieval brutal-
ity? Who knew!) to “House of Cards.”
The piece does include some point-
ed criticism, such as saying MBS has
created an unprecedented climate of
fear and repression in Saudi Arabia.
But it appears to fit as part of an
appealing male-domination narrative
that sells in the United States. After all,
it was Wood who also wrote a profile of
white supremacist Richard Spencer
that described him as looking “like the
scion of a Montana banking family,
dressed up and ready to film a com-
mercial in a log cabin, assuring local
ranchers that their deposits would be
safe with him.”
Most sickeningly, the Atlantic gave
MBS a platform to not only continue
his absurd denials of having anything
to do with Jamal’s murder (even
though it was carried out by figures in
his close circle and the CIA concluded
he gave the order to capture or kill),
but also to present himself as the real
victim. “The Khashoggi incident was
the worst thing ever to happen to me,”
the magazine reported that MBS has
told people close to him. The murder
“hurt me and it hurt Saudi Arabia,
from a feelings perspective.”
It would have been one thing for the
Atlantic to drill MBS on his role in
Jamal’s assassination. Instead, MBS
was allowed to denigrate Jamal, saying
he wasn’t important enough to kill.
“Khashoggi would not even be among
the top 1,000 people on the list.” It’s
hard to imagine that they would have
done this if Jamal had been American.
The profile has very little pushback
on Yemen (where the Saudi-led war
has caused a humanitarian crisis that
has killed as many as 85,000 children)
or about the many dissidents and ac-
tivists languishing in Saudi jails.
When I reached out to the magazine
for comment, a spokesperson said that
“we encourage people to read Graeme
Wood’s story for themselves. The
12,000-word piece addresses issues
about Saudi governance, religion, and
society, and also addresses variousmanifestations of MBS’s autocratic
and repressive rule.”
The comment was a classic dodge.
“Read the article” is not an answer to
why they decided to platform a tyrant.
Maybe the Atlantic thought MBS’s
own blatant lies and narcissism would
be enough to condemn him in the eyes
of readers.
But all they did was show them-
selves to be mere tools in MBS’s cam-
paign to restore his image. The long
piece recycles the same narrative MBS
has been promoting for years — that he
alone is standing between modern
Saudi Arabia and the religious con-
servatives. The writing is also sprin-
kled with dashes of orientalism, such
as the astonishment of watching
“Zombieland: Double Tap” in a theater
next to a woman who had sneakers or
seeing foreigners on flights on their
way to Comic-Con. There is little about
the Saudi regime’s AstroTurf cam-
paign to shower celebrities, influenc-
ers and PR firms with gobs of money to
populate their events and post on so-
cial media about their experiences.
But more crucially, the piece re-
inforces a superficial view of power
and treats the Saudi people as an after-
thought. Influential figures such as the
jailed cleric Salman al-Awda — who
arguably held much more influence
throughout the entire Middle East
with his progressive reformist views
before MBS came on the scene — are
given just a passing mention. Loujain
al-Hathloul, the women’s rights activ-
ist who was freed from jail, is given just
a few throwaway lines. There is little
engagement with their visions for Sau-
di Arabia, women’s rights and Islam —
which they had the space to express
before MBS came on the scene.
“Absolute Power” is an insult to
Jamal’s memory and to journalism.
When history looks back at this period,
this Atlantic piece will shine as an
example of how the path to the resur-
gence of brutal, global authoritarian-
ism is paved in no small part by the
worst aspects of access journalism in
the United States.KAREN ATTIAHThe Atlantic elevates MBS’s liesR EUTERS
Saudi Crown Prince Mohammed bin Salman in Riyadh, Saudi Arabia, in November 2019.BY BRADLEY GRAHAM“What’s the difference be-
tween Jeff Bezos and
me?”
For some time now,
I’ve asked people that question when
discussing the book business, which
Bezos and I are both in. Of course, he’s in
a lot of other businesses as well (he
owns The Post), while I just run an
independent bookstore. But he and I
both decided to expand our book opera-
tions around the same time several
years ago. We took very different tacks.
As head of Amazon, Bezos moved
from selling books just online to launch-
ing a string of physical bookstores
around the country, including two in
the Washington metro area. As co-own-
er of Politics and Prose, whose original
location is in Northwest D.C., I opened a
couple of branch stores in the city.
For his preferred sites, Bezos chose
Georgetown and Bethesda, two of the
most established — and expensive —
retail neighborhoods. They were also
where Barnes & Noble once operated,
until it found the locations too challeng-
ing and unprofitable for a bookstore
chain.
P&P’s branches opened in Union
Market in Northeast D.C. and the Wharf
in Southwest, two historically under-
served communities undergoing trans-
formation and renewed growth. Com-
mitted as P&P remains to its roots in
Northwest, where the store was found-
ed in 1984, we’ve sought to extend our
bookselling and community-building
efforts into other, diverse, dynamic
parts of the city.
From the outset, the purpose of the
Amazon bookstores was never clear.
Various accounts indicated their aim
was less to sell books than to promote
Prime membership and perhaps some
nonbook products.In style and concept, Amazon’s stores
differed markedly from the independent
bookstores that dot the D.C. landscape.
They conveyed the parent company’s ho-
mogenized corporate identity rather
than the distinctive character of their
communities. They lacked the quirky
personality and warmth of indies. And
their book offerings were based not on
the choices of individual buyers familiar
with the interests of local customers but
on data generated from Amazon’s online
shoppers. Walk into an Amazon book-
store and you’d see what everyone else
was reading, not a thoughtfully curated
selection of books worth discovering.
So, it was hardly surprising to me
when Amazon confirmed on Wednesday
that it was closing its 24 bookstores. It is
also terminating its pop-up kiosks and
4-Star stores, which carried electronics,
toys and home goods.
But Amazon isn’t getting out of brick-
and-mortar entirely. The company now
intends to focus its physical retail efforts
on Amazon Fresh, Whole Foods, Amazon
Go and a new fashion venture, Amazon
Style. In the process, Amazon is also
likely to keep pursuing its “Just Walk
Out” technology, which dispenses with
checkout stations.
Amazon’s retreat from the physical
bookstore business underscores what
those of us in it know all too well: It isn’t
easy. It requires superb customer service,
dedicated staff who provide knowledge-
able advice about what to read, an invit-
ing environment in which to browse and
shop, and literary activities that connect
patrons directly to authors through book
talks and other programming. Most of
all, it demands a deep commitment to the
local communities that sustain us.
Even through the pandemic of the
past two years, most independent book-
stores have managed to survive. Doing so
has meant doing what indies do best,
which is adapting, innovating and stay-ing focused on community. At P&P, we
started offering curbside pickup and
local delivery services, moved our author
talks and literary classes online, and
expanded our Web order capabilities, all
while keeping staff employed and pro-
tected from covid-19.
But Amazon remains a major threat to
us and to independent bookstores every-
where. Though it’s now shuttering its
physical book outlets, the company per-
sists as a dominant presence online,
choking competition and engaging in
unfair practices.
A national conversation about the
costs and consequences of Amazon’s
enormous power is already underway,
with attention being paid to how the
company adversely affects neighbor-
hoods through the erosion of jobs, a loss
of character for our hometowns and less
money in sales taxes for local economies.
Hopefully, this attention will lead to
some sort of breakup or regulation.
In the meantime, it will be up to
customers to make the critical choice
between shopping indie and shopping
Amazon. As Allison Hill, chief executive
of the American Booksellers Association,
stated, “As the pandemic subsides and we
return to the social spaces that bring us
together, we will decide whether we want
to be commoditized or recognized as
individuals. Independent businesses all
across the country add diversity, charac-
ter and humanity to our communities
and they need our support.”
I’m not going to spend much time
gloating over the end of Amazon’s book-
stores. Not given the challenges Amazon
still poses. But now there’s a new answer
to the question about the difference be-
tween Jeff Bezos and me: I’m in the
physical bookstore business, and he’s not.Bradley Graham is a co-owner of Politics and
Prose in Washington, D.C., and a former
reporter and editor for The Post.I’m a bookseller. Here’s the differencebetween Jeff Bezos and me.