Alexander Lorenzo explains how JP Morgan's stablecoin on Base and tokenized treasuries create a money duplication effect: banks convert cash to stablecoins while investing the underlying cash in government debt, then use tokenized debt funds as collateral to borrow and leverage, amplifying liquidity and risk.
It's official. The government is duplicating your money on the Base chain specifically, and they're using government debt to pull it off. JP Morgan just launched their stablecoin on the Base chain. Now institutional clients can use the public blockchain with their stablecoin. I'm gonna show you how you can make money off this, but as you can see right here, you can get a JP Morgan stablecoin issued through JP Morgan and literally put it on the open blockchain, and then you're able to swap that stablecoin with USDC. This opens a very crazy world of possibility. Let me show you. The first concept you got to understand is tokenized treasuries. So right now you could actually go to the government and buy their debt. And if you buy their debt, they'll guarantee your money back plus interest, right? And right now we have tokenized versions of that. So essentially these people right here, they pull together a whole bunch of money and then they use that money to buy government debt. And the yield gets paid out to the fund, and we have a token version of that. This is tokenization. There's like a crypto attached to that. We're currently sitting at $8.4 billion, but after this, it's probably going to go up a lot. If you combine that with the fact that the Genius Act allows banks to legally issue their own stablecoin, again, it gets out of control. Let's say you're a person and you have $100 grand and and you want a stablecoin so that you can use it in crypto, right? Give you $100,000 worth of JP Morgan coin. You can go buy altcoins. You can do whatever you want. Well, when you buy a stablecoin, they're legally allowed to take your cash and put it into an investment. So you get the $100,000, but the bank is getting money back from government debt. Let's say 8% yield. The government is paying the bank, not you. We know this, but here is where it gets really, really crazy. The person that got the $100,000 in stablecoins is now legally allowed to put it in tokenized debt. So the government gets $200,000 investments for the one initial $100 grand. That's a duplication. Now what gets really crazy is that the fact that not only did we get this duplication and both allotments of money is going back to pay government debt, but we also can take loans against this. So this US USYC is the token that you get for putting your money into Circle's tokenized debt fund. This is from Circle, the creators of USDC. They created this. So you'll get a token called USYC, and you could actually take a loan against that. So this person in this case is putting the money back into government debt, but they also could take 70% of it and use it to buy altcoins or do leverage. So you get— bro, everybody is getting this duplication And all that liquidity, the sloshing of the liquidity back and forth, is in crypto specifically.
