The global fascination with cryptocurrencies shows little sign of fading. What began as a fringe technological experiment has evolved into a multi-trillion-dollar ecosystem that now commands the attention of governments, regulators, banks, and ordinary citizens alike. In the United States, the passage of the Guiding and Establishing National Innovation for US Stablecoins Act-better known as the Genius Act-in July marked a symbolic turning point. It signaled that crypto assets are no longer operating entirely in regulatory limbo and that lawmakers increasingly accept their permanence in the financial landscape.

Yet beneath the hype, lobbying, and promises of innovation lies a fundamental and unresolved question: are cryptocurrencies a genuine advancement that serves the common good, or are they a speculative force that undermines financial stability and social welfare? While the crypto industry presents itself as a revolution in money and finance, a closer examination suggests that its social costs may outweigh its benefits, particularly when private digital assets are allowed to grow without adequate oversight.

To assess crypto’s societal value, it is essential to distinguish between different types of digital assets. Broadly speaking, cryptocurrencies fall into two categories: unbacked cryptocurrencies and backed cryptocurrencies, commonly known as stablecoins.

Unbacked cryptocurrencies such as Bitcoin and Ethereum have no underlying assets. Their value is derived entirely from collective belief-what others are willing to pay for them. There are no cash flows, productive uses, or state guarantees to support their price. In contrast, stablecoins attempt to anchor their value to real-world assets, typically by pegging their price to a national currency like the US dollar and holding reserves such as cash, Treasury bills, or money-market instruments.

Despite this distinction, both categories face the same two fundamental questions: are they viable over the long term, and do they benefit society? While the first question is uncertain and can only be answered over time, the second invites a far more skeptical response.

There is no denying that blockchain technology has generated valuable innovations. Distributed ledgers, smart contracts, and decentralized finance applications have introduced new ways of recording transactions, automating agreements, and reducing certain operational frictions. These tools may well find enduring uses in payments, supply chains, and data verification.

However, the proliferation of private digital currencies is a different matter. Instead of aligning private incentives with public interest, cryptocurrencies often widen the gap between the two. The bulk of........

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