The GENIUS Act, passed by the US Congress in July 2025, creates a regulatory framework for stablecoin issuance in the United States. This legislation represents more than cryptocurrency regulation; it embodies a shift toward a new form of authority over monetary policy. In fact, in my view, this new form of authority is a contemporary manifestation of patterns that have recurred throughout history when elites adopt new money forms to assert their authority, gather followers and manage their own political positions.
A look not only at the history of monetary change and capture by past elites but, perhaps more surprisingly, the anthropology of tribal societies illustrates the case — and helps pose alternatives that I believe are contained within the technology that gave rise to stablecoins in the first place.
Gilded Age money and anthropology
The US Presidential election of 1896 centered on what was called “the money question”: whether the US should stick with a gold standard, or switch to a bimetallic standard where gold was supplemented by plentiful silver from newly discovered finds in Nevada as backing for the dollar. The strictly gold standard would limit the money supply, preventing inflation while benefiting creditors — particularly wealthy East Coast and Northern banks and businesses. That was precisely the problem in the eyes of opponents: keeping the dollar tied only to the value of gold would preserve wealth for the already-wealthy to the detriment of farmers and debtors. It seems odd to us, after more than a century of independent central banking and fiat money, that the money question was the single defining political debate of late 19th century America. But perhaps that’s because the question was settled so decisively. By 1900, the US went on the gold standard — a victory for elite monetary control — and kept it in place until Richard Nixon famously “closed the gold window” in 1971.
As an anthropologist, news of the GENIUS Act and the move of cryptocurrencies into the US political mainstream has reminded me of a work of anthropological theory on the origins of money from the same era as the 1896 election. Heinrich Schurtz, writing in 1898, provided a theoretical framework for understanding how monetary systems reflect and reinforce political hierarchies. His work addressed mainly tribal societies, but Schurtz’s insights prove remarkably prescient for helping us understand the contemporary moment. In other words, a Gilded Age anthropologist’s analysis of tribal money is applicable to the patrimonial money we are witnessing today.
Inside-money and outside-money
Schurtz’s analysis hinged on the distinction between what he called “inside-money” and “outside-money” (terms he used quite differently from modern banking professionals). For him, inside-money consisted of items used within a society to mark relationships through social payments: marriage payments, mortuary exchanges, fines for societal breaches. This is the often quite beautiful material we see labeled in museums as “primitive” money: strings of beads, coils of woven feathers, dogs’ teeth, shell necklaces. It was often produced for — or even by — elders or other elites, who then controlled its supply and distribution. In order to become a true adult, you had to demonstrate respect to those elites to get some of that inside-money to provide evidence of yourself as a moral person. Outside-money, in contrast, entered societies through external trade, detached from internal social institutions and norms, making it potentially destabilizing because it might free non-elites from traditional obligations. Outside money included exchangeable commodities, medallions and, eventually, coins from city-states.
Schurtz observed that elites therefore guarded against the incursion of outside-money, all while hoarding it for themselves. Those outside-moneys — which elites were able to acquire because of their pre-existing position in hierarchies — then served to affirm elites’ authority. Think of the king sending a merchant off to the Americas to bring back exotic wares which he then controls. In other words: “I got this because I am a chief; I now possess it exclusively because I am a chief.”
Hence, for example, in places with naturally-occurring gold, Schurtz noted that it “swiftly and decisively joins the ranks of monetary instruments” — but nevertheless doesn’t become a universal standard. Instead, it “maintains a certain prestige and is typically not used to purchase large quantities of low-quality goods but only exchanged for particularly beautiful or precious things” which are generally controlled by those of high rank. In other words, rank makes money, and money then reflects rank.
This principle seems to have found new life in the digital age.
Patrimonial money in digital form
The GENIUS Act bars “any member of Congress or senior executive branch official from issuing a payment stablecoin product during their time in public service.” Yet even in advance of administrative rulemaking for the law, stablecoins are already being issued by people closely connected to political power. Democratic lawmakers attempted to amend the bill to extend the conflict-of-interest provisions to the president and vice president, instead of merely covering members of Congress and senior executive branch officials. But they failed, meaning that the president and vice president are permitted under the act to issue their own stablecoins.
The GENIUS Act’s focus on payment stablecoins, meanwhile, contradicts actual social practice. The dominant current use case for stablecoins is as a way to buy crypto without having to go through traditional financial intermediaries. Instead of linking a conventional bank account to a crypto exchange, I can purchase stablecoins and use them to fund my crypto exchange account, allowing me to quickly and easily buy and sell different cryptocurrencies and play the market faster without facing withdrawal fees. While using crypto as a means of exchange has long been the dream — embodied in the original Satoshi whitepaper inaugurating Bitcoin — people have always treated crypto like an investment, a sort of “digital gold” to get rich quick and stick it to the system. Payment stablecoins are a bridge to other forms of crypto used for the purposes of speculative investment, not forms of payment. Stablecoins can also serve as a refuge during a downturn, and so, in the end, a store of value: again, a kind of digital wealth.
‘An elite-dominated stablecoin market will instead be an expression of the patrimonial state — serving loyals rather than creating competing new royals.’
Contemporary stablecoins also contradict crypto’s original animating philosophy and practice. In the beginning, Bitcoin was a bottom-up response to what was seen as elite corruption — manifested in the bank bailouts of the 2008 financial crisis. (Reference to this is made in the so-called Genesis Block of the Bitcoin blockchain, upon which a crisis-era headline from the London Times is encoded: ‘The Times 03/Jan/2009 Chancellor on brink of second bailout for banks’).
Over time, there emerged a tendency toward recentralization and the dominance of the blockchain sector by legacy financial institutions, large-scale blockchain industry players (especially exchanges), charismatic CEOs, and now, powerful political families. What was once a populist “inside” response to an inside-money that, in early crypto advocates’ perspective, had been captured by elites (the US dollar or fiat currency more broadly, through banking institutions and the government) is now, in elites’ hands, a new shiny object that they can bring in from “outside” and market as a token of their magical elite substance — or, more prosaically, as merch.
In a patrimonial state, as political scientists Stephen Hanson and Jeffrey Kopstein have argued, the interests of the “people” are equated with the personal interests of the ruler and his extended household. Under such arrangements, conflicts of interest become, as they note, “little more than a quaint anachronism.” The whole of the apparatus of the state is treated like a family business. Stablecoins issued by those in power should not be seen as corruption in the usual sense but simply the conflation of the interests of the state and leader.
The wobbling reserve foundation
The GENIUS Act’s treatment of stablecoin reserves reveals the deeper contradictions — and perhaps unintentional comedy — at the heart of this patrimonial monetary project. While stablecoins are supposed to be backed by reserves (the term itself references a store of items of value), the actual legislation provides quite a bit of creative flexibility in what constitutes adequate backing. This, in turn, amplifies risk for those not in positions of power to issue or redefine money — in other words, those hoping to obtain wealth through these new monies.
Reserves can include various dollar-denominated monetary instruments and even repurchase agreements, or “repos” — a category of short-term borrowing that brings to mind the supposedly stable and bank deposit-like money market funds that actually lost money (or “broke the buck”) in 2008 and 2020, requiring Treasury Department bailouts. Furthermore, the stablecoin industry has been home to a veritable parade of scandals involving absent or inadequate reserves. Promises of solid backing by “real” things of value have too often evaporated upon closer examination. The value of any “reserve” also remains questionable in an inflationary environment that specifically targets that reserve.
This flexibility in picking what reserves will undergird a stablecoin reflects what Schurtz identified as a fundamental characteristic of elite monetary control: the ability to maintain authority through the strategic deployment of scarce objects while retaining discretion over their backing and circulation. During America’s era of wildcat banking in the early 19th century, when paper money was issued by a slew of (sometimes dubious) state-chartered private banks, the idea of value was animated by an imaginary structure of gold bullion. There was supposedly gold in the bank, or railroad bonds, or mortgage paper. But too often, those assets were overvalued — if they even existed at all. The contemporary version simply substitutes digital tokens for paper notes and Treasury securities for gold bars.
Stablecoins as dazzling objects
Contemporary stablecoins function as dazzling objects like any good “tribal” money you might find in a museum — items that hold attention, congeal passion, and inspire mimetic desire among followers of charismatic leaders. Schurtz noted that elites maintain authority by strategically gifting from their accumulated hoards of outside-money to continually reaffirm their position in hierarchies. Those gifts show off their exclusive access while also reinforcing loyalty. The ability to create these instruments becomes a gift bestowed by sovereign authority upon favored clients, who then have the “privilege” of purchasing them in exchange for… well, we’re not quite sure what, exactly.
The GENIUS Act’s prohibition on interest payments serves this same logic — it prevents stablecoins from enabling the extension of social and financial relationships that credit typically engenders, while still maintaining their function as mechanisms to demonstrate fealty and favor.
The banknote industry as foil
If I’m being intentionally provocative here, it’s because I think the GENIUS Act forecloses the true potential of blockchain technology to democratize finance. Stablecoins have been promoted with rhetoric of financial inclusion and access, or the need to provide an alternative for people in countries with failing currencies (often rich elites) for their investments. But an elite-dominated stablecoin market will instead be an expression of the patrimonial state — serving loyals rather than creating competing new royals. This is the hazard of money systems sutured to personal political authority, whether in a tribe, kingdom or a possible future stablecoin-oriented US.
Paper banknotes, the physical objects that digital stablecoins are now seeking to replace, provide an analogy that highlights the democratic possibilities of money, and the shortfalls of stablecoins as envisioned by the GENIUS Act.
The major purveyors of banknotes have long been family firms, privately held and shrouded in secrecy — in a word, patrimonial. Companies like SICPA in Lausanne — originally the Société Industrielle et Commerciale de Produits Alimentaires, founded by Maurice Amon who transitioned from dairy operations to special inks — exemplify this historical pattern.
What those banknote providers have always done resembles the contemporary stablecoin operation: producing complicated objects that are both industrially mass produced and yet still “unique” through designs and special techniques that are difficult to replicate. Yet banknotes enable the kind of widespread circulation that puts the purity of elite control at risk. Cash facilitates the anonymous and democratic exchange that Schurtz identified as potentially destabilizing to hierarchical authority. Cash can circulate among anyone, anywhere, for anything; hence efforts by some countries to limit its circulation by channeling people toward digital payment options for surveillance and control (think China or India). Like a stablecoin, a banknote is a unique and irreplicable product — but unlike a stablecoin (at least under the GENIUS Act) cash allows infinite transactional possibilities.
A shiny glint of hope
Schurtz’s prescient analysis, however, offers a bit of hope for our current predicament. He suggests that elite monetary authority, and its domination of outside-money, can only persist until another competing new outside-money emerges. Once that happens, it could be that existing elites or their would-be usurpers begin using the newer forms of outside-money to dazzle their subordinates. But alternatively, a form of inside-money might reassert itself. To bring us back to the present, in the stablecoin case, blockchain communities might manage to devise alternative economies that challenge the recentralization of monetary authority under patrimonial elites and move us back toward realizing the more decentralized dream sketched by earlier crypto supporters.
Schurtz identified a historical pattern that shows how monetary innovations cycle through phases: initial elite capture of outside-money, its transformation into a tool of authority, eventual democratization or displacement by newer forms and, finally, the reassertion of different monetary arrangements. Memecoins and crypto in general have always been about hype and hope, and fashion is, after all, fickle.
‘History suggests that such arrangements, however dazzling in the short term, tend to give way to more democratic alternatives.’
The GENIUS Act, in my view, represents a contemporary manifestation of those same patterns that Schurtz — writing more than a century ago — identified across diverse historical contexts. By concentrating stablecoin issuance authority and permitting issuance by the most powerful members of the executive, while permitting murky reserve requirements and removing stablecoins from the world of credit and debt, it creates conditions for what he would recognize as elite monetary control through the strategic deployment of scarce and prestigious (digital) objects animated by patrimonial authority or charisma.
Yet Schurtz’s framework also points toward the inherent instability of such arrangements. The excesses of the Gilded Age, after all, led to the Progressive Era, which delivered profound monetary democratization and enabled the 20th century institutional development of the Federal Reserve system and modern banking. In our own era, monetary innovations may well follow similar trajectories, with periods of concentration followed by broader democratization. But that would be the outcome of political choices and political movements around money.
The holders of contemporary stablecoins, like the subordinates in Schurtz’s historical analysis, will likely remain supplicants rather than insiders. But the fundamental question — of whether alternative monetary arrangements will emerge to challenge this concentration of authority — remains wide open. And that openness, following the historical patterns Schurtz documented, gives us reason for cautious optimism.
As the German sociologist Ralf Dahrendorf observed, “established norms are nothing but ruling norms, i.e., norms defended by the sanctioning agencies of society and those who control them.” The GENIUS Act seeks to establish new ruling norms around monetary authority. Whether these prove durable will depend on the dynamics Schurtz identified: the ability of elites to maintain exclusive access to prestigious monetary objects while managing the tensions such exclusivity creates.
History suggests that such arrangements, however dazzling in the short term, tend to give way to more democratic alternatives. But we should consider whether there are ways to make this so, as well as contemplate what forms those alternatives might take. If blockchain technology lives up to its democratizing potential, we may yet see a challenge to patrimonial money after all.
