Krugman warns: Easing regulations + promoting stablecoins, the risk of a financial crisis is accumulating.

The Nobel Prize-winning economist Paul Krugman recently issued a stern warning, stating that the current government's “inner circle” is doing something dangerous - dismantling the protective wall that was painstakingly built after the financial tsunami of 2008. In an article published last Friday, he bluntly stated that these people are preparing to “celebrate like in 2008.”

Krugman specifically mentioned the area of bank regulation. Federal Reserve Governor Bowman, who was nominated by Trump, is now pushing for the relaxation of bank capital requirements. It sounds like banks can make a bit more money in the short term, but the problem is—this will fully ramp up the risk of the next crisis. Weakening regulation? The core functions of the Federal Reserve have been tampered with.

What worries him even more is the situation with stablecoins. The current government is clearly backing the crypto industry, and the GENIUS Act is a signal—mainly to give stablecoins the green light. Krugman directly cited companies like Tether as examples: regulation is basically in a vacuum, and if things go wrong, it could lead to a repeat of the chaos of 19th-century private banks, with systemic risks potentially erupting at any time.

In plain terms, he thinks this is playing with fire. The lessons from the financial system have not been forgotten, and some people are already starting to dismantle the rules.