The stablecoin market is about to explode from $234 billion to $2 trillion - and CPAs are sitting on the opportunity of a lifetime.
President Trump signed the Genius Act on July 18th, creating the first federal framework for stablecoins. This isn't about Bitcoin or Ethereum. These are cryptocurrencies backed 1:1 by US dollars.
Here's the opportunity for CPAs:
Every stablecoin issuer will need monthly attestation reports from PCAOB-registered firms. That's monthly recurring revenue for accounting firms.
The new regulation allows companies like Walmart or Amazon to issue their stablecoins. Why would they want to do this? It's simple. They collect your dollars, invest the reserves in treasuries earning 4%, and keep the interest. And when you spend your stablecoins with them, they pay zero credit card processing fees.
Your Starbucks card could become actual currency you use to pay friends. Maybe Walmart offers discounts for purchases with "Walbucks." They might even start paying their employees using stablecoins.
But here's my concern:
These stablecoins aren't FDIC insured, meaning you might not get your money back if the issuer goes bankrupt. We're recreating America's free banking era from the 1830s, when banks printed their own money. During that time, we also had lots of bank failures. Michigan residents lost HALF their money in one year when their banks collapsed.
We discussed this in a recent episode of The Accounting Podcast. My co-host, David Leary, pointed out that monthly attestations don't necessarily protect the public. Companies could gamble with reserves for 29 days, then clean up before the monthly audit. It's begging to be gamed.
The doomsday scenario?
A classic run on the bank. Everyone tries to cash out stablecoins at once. Issuers dump treasury reserves to pay out the stablecoin holders, bond prices crash, and interest rates spike. Throw in quantum computing potentially breaking crypto encryption in a few years, and we've got systemic risk that could trigger a financial crisis.
By the way, Tether, the biggest stablecoin, has never been subject to a full audit. It chose to leave the EU rather than comply with regulations. Now, it has three years to get its act together.
My take? This is too big to ignore.
Some accounting firms will make fortunes on these attestation engagements, while others will avoid the risk entirely. Just like with SPACs, a handful of firms will likely capture 90% of this market.
If you're an auditor, you must decide: Are you willing to take calculated risks for potentially massive rewards? The entire system depends on CPAs doing perfect work. No pressure!
