“Is 2025 the ChatGPT moment for money?” Bloomberg asked this morning.
We think so.
Following the Federal Reserve’s Payments Innovation Conference, which we’ve detailed here on the website in our special reports, we’ve had a ton of readers writing in asking for an update on the progress of regulations for “Dollar 2.0” — the digital wrapper being developed for the nation’s currency.
Like most technological revolutions, it’s arriving at the speed of a bureaucrat filling out a form in triplicate.
Stablecoins — digital chameleons pretending to be dollars — are edging closer to the checkout counter. Tether’s USDT and Circle’s USDC still dominate the field, but now there’s a new cast of contenders in emerging markets where people trust their phones more than their banks.
Take EBANX, the Brazilian-born payments facilitator helping shoppers in Latin America, Africa, and Asia buy from Uber, Airbnb, or Spotify. “Today, 100% of our customers pay with fiat money,” João Del Valle told reporters at Hong Kong FinTech Week. “The mainstream user isn’t using stablecoins.”
That may soon change. For Citigroup’s forecast of $1.6 trillion in stablecoin circulation by 2030 to materialize, smart contracts — software that automates blockchain transactions — will have to do the heavy lifting.
They promise to cut costs by replacing armies of compliance officers with a few lines of code. That’s a benefit. Right?
Imagine a Chinese tourist paying in yuan from her Alipay+ wallet at a shop in Singapore that only accepts GrabPay. Thanks to smart contracts and XSGD — Singapore’s own blockchain dollar — the transaction completes instantly.
The Monetary Authority of Singapore says XSGD and its sibling XUSD already meet regulatory standards.
When StraitsX first launched XSGD as an experiment in 2019, no one — least of all regulators — knew what to make of it. Six years later, nine billion XSGD have changed hands. Customers have quietly voted with their digital wallets.
Still, it’s early. One must have patience.
In the U.S., stablecoin rules remain tangled between crypto exchanges eager for new customers and small banks afraid of losing deposits.
China’s Ant Group is filing trademarks for “Antcoin” while the Party debates whether digital dollars threaten national sovereignty. And in Singapore, StraitsX cofounder Samson Leo frets about regulatory fragmentation: “If every jurisdiction requires us to split reserves across their banking systems, customer protection will diminish.”
Stablecoins today are where email was when businesses still faxed each other printouts of their inbox goes an apt analogy suggested by Bloomberg’s Andy Mukherjee.
The rails are there — the habits aren’t. But the shift is coming. And when it does, it won’t just change how we pay — it’ll change who gets paid.
Important note: If you’re a paid-up member, please refer to your special report on Dollar 2.0 to understand our recommendations clearly.
Markets Without a Map
The markets this week have been wandering in search of a plot. Over the last five trading days, the Dow’s off 1%, the S&P 500’s down 2%, and the Nasdaq — our high-strung barometer of optimism — has shed 4%. Gold’s lost its recent gleam. Bitcoin, never one to miss a drama, is down nearly 8%.
There’s no unifying narrative — just noise. Trump’s tariffs are before the Supreme Court. AI stocks are cooling. And the euphoria that built trillion-dollar market caps is giving way to hangover math.
Warren Buffett’s favorite metric — the “Buffett Indicator” comparing total U.S. market value to GDP — now stands above 200%. In plain English, the stock market is twice the size of the economy it supposedly represents.
Even as the AI buildout continues, the seeds of its disruption are already germinating. Wafer technology, the basis of every modern chip, is approaching physical limits. George Gilder, ever the contrarian, argues this heralds the end of the Nvidia model — and the beginning of something stranger.
As he writes, “Every empire dies from the inside out — the microchip era will be no different.”
AI’s Invisible Crash
Economically speaking, artificial intelligence isn’t crashing — it’s deflating. Quietly, relentlessly… in a good way.
The cost of your laptop “thinking” has fallen off a cliff.
Generating a million AI “tokens” — those little digital brain cells that make ChatGPT sound clever — cost about $60 in 2021.
Today, it’s $0.06. That’s a 1,000-fold drop in three years. Cheaper thought, cheaper code, cheaper everything.
It’s the same dynamic that detonated the first internet boom: costs collapsed, creativity exploded.
When bandwidth went from $1,200 per megabit to pennies, the world got YouTube, Google, and cat memes. What followed wasn’t a “bubble burst” so much as the cost structure melting down until anyone could build something in their dorm room.
AI is following the same physics. The infrastructure bubble — all the chips, data centers, and cooling towers — may pop, but what it leaves behind is the real revolution: intelligence priced like tap water.
“AI isn’t the bubble — the infrastructure is,” the Financial Times sums up our Anatomy of a Stock Market Bubble argument in one sentence: “the crash will fertilize the next boom.”
Imagine cognition becoming a commodity, “too cheap to meter.”
Lawyers drafting contracts in seconds. Biotech firms designing drugs in days. Economists replaced by — well, slightly more accurate chatbots.
The collapse of cost is the collapse of scarcity itself, and nothing upends markets faster than abundance. That’s a good thing… investments in super high valuations on the S&P 500 are not.
Elon’s Trillions
What’s not collapsing is the cost of one unique tech entrepreneur. Tesla shareholders approved Elon Musk’s $1 trillion pay package — the largest in history and perhaps the purest expression yet of our age’s faith in personality over productivity. Three-quarters of investors voted yes, apparently deciding that paying Musk to stay was cheaper than paying anyone else to try.
The deal ties his fortune to “Mars-shot milestones”: a $2 trillion market cap, 20 million Teslas on the road, and a few humanoid robots that won’t unionize. Opponents ranged from Norway’s $2 trillion sovereign fund to CalPERS to the Vatican, all warning that Tesla’s board resembles a Musk family reunion. Musk called them “corporate terrorists.”
“Paying Musk to stay,” opined Bloomberg, “ is like offering Captain Ahab a yacht club membership to stop chasing whales.”
Still, there’s an undeniable logic. Musk is the moat. Tesla’s stock trades less on deliveries than devotion. Investors aren’t necessarily buying cars, but they are buying musky charisma in bulk.
Congress Shrugs, Again
Rather than conceive of a reopening strategy, Congress spent last night debating war powers — and decided not to bother.
By a vote of 49–51, the Senate rejected a bill requiring congressional approval for Trump’s latest strikes against Venezuela. Two Republicans broke ranks; everyone else yawned. “It’s an open secret this is about regime change,” said Rep. Adam Schiff.
Somewhere, James Madison is sighing softly into his powdered wig.
The City That Never Learns
New York’s new mayor-elect, Zohran Mamdani — the 34-year-old socialist with more slogans than management experience — continues to divide the moneyed class.
“Business people are thinking, ‘Watch your ass, you’re in combat,’” said oil billionaire John Catsimatidis. “He’s a kid. If he applied for a job, I wouldn’t hire him to run a supermarket. I’m reducing my exposure to New York.”
The city’s new slogan practically writes itself: “If you can’t make it here, you can always move to Florida.” There’s a meme floating around the internet showing Zohran’s face as Florida’s “realtor of the year.”
Shutdown, Day 38: Government on Autopilot
The government shutdown has now lasted 38 days — the longest in U.S. history and roughly equal to the shelf life of a lettuce in D.C. humidity.
Seven hundred flights were canceled this morning as air traffic controllers and TSA agents ran out of patience (and paychecks). Lawmakers, ever industrious, are discussing yet another stopgap bill to fund the government until Thanksgiving — assuming the turkey doesn’t need clearance from the FAA.
At this point, shutdowns are less a political failure than a seasonal tradition — like daylight savings or potholes. What’s really absurd? We have a historical record of shutdowns dating back 50 years.
And lest we forget, it wasn’t too long before that, presidents could, in fact, run for more than two terms, a precedent first set voluntarily by George Washington but not codified into law.
On this day in 1944, Franklin Delano Roosevelt was elected to an unprecedented fourth term as president — the only American ever to do so.
FDR steered the country through the Great Depression and World War II, all while confined to a wheelchair, and died in office before seeing the war’s end. His tenure was so long — and his power so great — that Congress eventually passed the 22nd Amendment to prevent such a situation from happening again.
It’s worth remembering, on days when Washington can’t stay open for five weeks, that the republic once tolerated a leader who stayed for twelve years.
And who can forget Joe Biden, who hung out there for 50+… or Chuck Schumer, 44 years and counting (he hopes)? We’re sure there are more winners, but it hurts to think about it.
Enjoy your weekend,
~ Addison
P.S. Yesterday’s Grey Swan Live! chat with Harry Dent raved about AI — massive new life-altering technology — while also admitting there’s an AI stock market bubble forming.
“Stock market crashes and economic recessions,” Dent says, “are a good thing!” It’s what the government does to fight them that causes problems in people’s lives. To understand Harry’s cold, hard point of view, watch the replay here:
If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.
