Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Axios on your phone

Get breaking news and scoops on the go with the Axios app.

Download for free.

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Annelise Capossela/Axios

Stablecoins — digital currencies linked in a fixed 1-to-1 exchange rate to real currencies like the dollar or the euro — face an existential threat from the world's central banks.

Why it matters: If the future of currency is digital, then stablecoins offer version 1.0 of what a digital dollar might look like. But they are also under-regulated, systemically risky, and uniquely vulnerable to the rise of official central bank-backed digital currencies, or CBDCs.

Where it stands: Stablecoins have been growing fast. The two largest, Tether and USDC, are now worth more than $100 billion combined, up from less than $25 billion at the beginning of the year.

  • The quality of the collateral backing Tether, and even the existence of that collateral, is worryingly vague. Fears remain that if Tether is revealed to be a Ponzi, its collapse could bring down bitcoin and the whole world of cryptocurrency.
  • The dream of stablecoins is that they will be used for payments — and that's already beginning to happen, in a very small way.
  • Regulators have taken note: The Bank of England, for instance, in a new discussion paper, has made it clear that stablecoin payments need to be regulated just as assiduously as anything passing through the banking system.

The big picture: A CBDC is the ultimate stablecoin. Rather than forcing users to trust that some private company is backing its coins with real currency, CBDCs are directly backed by the full faith and credit of the sovereign.

  • Stablecoin defenders, like Circle, which issues USDC, say that CBDCs could destabilize the banking system by causing deposits to migrate from banks to retail accounts held directly at the central bank.
  • Yes, but: CBDCs can easily be set up as two-tier systems where banks issue their own wallets and individuals can't hold direct accounts with the central bank.

Between the lines: Early CBDCs have been introduced either in countries where the government desires visibility into every commercial transaction (China), or in countries where traditional banking and payments are extremely difficult for topographical reasons (the Bahamas).

  • The Fed is moving slowly on creating its own digital currency — this is an area where there's no real first-mover advantage, and where countries can learn a lot from those who go before them.

The bottom line: Stablecoin issuers aren't going to face direct competition from the U.S. government any time soon. But, in 2008, money-market funds almost brought down the financial system. No regulator wants to take the risk that stablecoins might similarly become too big to fail.

Go deeper

El Salvador passes law to become 1st country to adopt bitcoin as legal tender

President Nayib Bukele during a May 25 event in San Salvador, El Salvador. Photo: AphotografiaP/Getty Images

El Salvador's legislature voted early Wednesday to make bitcoin legal tender.

Why it matters: El Salvador will become the first country to formally adopt the digital currency once President Nayib Bukele signs the legislation into law.

Updated 16 mins ago - Health

White House acknowledges U.S. will miss July 4 vaccination goal

Fireworks in New York City to celebrate the state reaching a 70% vaccination rate. Photo: Liao Pan/China News Service via Getty Images

The Biden administration acknowledged on Tuesday that it will likely miss its goal of vaccinating 70% of U.S. adults with at least one dose by July 4.

Why it matters: Despite falling short of the goal, the White House still believes most Americans will be safe to fully celebrate Independence Day, as COVID-19 cases and deaths remain at low levels throughout much of the country.

Exclusive: Quartz, NYT vets launch new media company about work

Photo credit: Emma Howells for Charter

Quartz co-founders Kevin Delaney and Jay Lauf, along with New York Times veteran Erin Grau, are launching a new media and services company called "Charter" that is centered around the future of work, the founders told Axios.

Why it matters: "There are other media companies that write about this topic — some occasionally and some more frequently, but it's one topic among many things that they do," Delaney said. "This is a driving focus for us."

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!