STABLECOINS DO CREATE CREDIT, JUST NOT LIKE BANKS

Summary from the TLDR Crypto newsletter

Stablecoins, such as Circle's USDC, actively create credit through their reserves, including treasuries (loans to the government), repos (secured loans to financial institutions), and bank deposits (loans to banks). This structure qualifies as credit creation, even without fractional lending. Banks account for just 20% of U.S. credit, with trillions more generated through money market funds and securitized debt like MBS. Narrow-bank stablecoins are less prone to runs, need no bailouts, and offer safer intermediation, making them a financial upgrade, not a threat.