Federal Monetary Policy, Digital Asset Legitimization, and Consumer Risk

What this warning covers

Between January 2025 and September 2026 the United States government took a series of policy actions that together reduce the capital protection of bank depositors, legitimize speculative digital instruments as stores of monetary value, extend the debasement of the United States dollar through new channels, and remove the enforcement office that had been assembling the record on the cryptocurrency industry. This warning identifies each action by its date, states the consumer risk each creates, and places the group's objection to each on the public record.

Consumer concern 1: Basel capital standards are being reduced in the United States, and depositor protection with them

On 30 January 2026 the Trump administration nominated Kevin Warsh to succeed Jerome Powell as Chairman of the Federal Reserve, and Mr. Warsh took office on 22 May 2026. He has opposed, in public and consistently, the Basel III capital requirements that implement the international banking standards agreed after 2008.

On 19 March 2026 the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation jointly proposed three rules on bank capital. The agencies' own release states that the amount of overall capital in the banking system would decrease if the proposals are adopted, and the Federal Reserve staff memorandum accompanying them puts the reduction in required common equity at 4.8 percent for the largest banks, 5.2 percent for the mid-sized and 7.8 percent for the smaller.

Why this is a consumer concern. Capital absorbs losses before losses reach depositors; capital is the protection that was missing in 2008. Reducing that capital while directing banks toward larger holdings of United States Treasury securities concentrates the banking system's risk in one asset, whose value follows the fiscal position of a government that ran a deficit of 1.8 trillion dollars in fiscal 2025 and whose deficit for fiscal 2026 the Congressional Budget Office projected at 1.9 trillion in February and raised to 2.1 trillion in August. Every depositor in every bank that reduces its capital under these proposals carries more of that concentration.

Why the historical precedent does not apply. The United States reduced the ratio of its post-war debt to its economy between 1950 and 1980 through inflation and growth. That worked because the largest generation in the country's history entered the workforce from the mid-1960s through the 1980s and drove output, consumption and tax receipts faster than the debt grew. That demographic engine is absent today: working-age population growth has slowed, and the starting debt is far higher, with federal debt held by the public at 101 percent of GDP in 2026 by the Congressional Budget Office's count. A post-war strategy run without the post-war conditions produces the debasement without the growth.

The group's position: the reduction of Basel capital standards in the United States runs against the international standards designed to protect depositors and financial stability after 2008, and represents a material risk to consumers.

Consumer concern 2: Cryptocurrency is not a store of value, and a government's endorsement does not make it one

On 6 March 2025 the Trump administration established by executive order a Strategic Bitcoin Reserve, designating bitcoin a reserve asset of the United States and describing it as a store of value comparable to gold.

Why the description is incorrect. A store of value contains value; it does not reference a promise that value exists elsewhere. Gold contains value: the metal is the asset, and its value depends on no issuer's credit, no government's restraint and no market's confidence. Bitcoin contains no asset. Its price is the collective expectation that others will pay more later, and when that expectation reversed in 2022 the cryptocurrency markets lost trillions of dollars of market value within months. Sovereign endorsement lends the appearance of legitimacy to an instrument that fails the first monetary test.

Bitcoin's fixed supply of 21 million coins, presented as the basis of its store-of-value claim, works against the claim. A monetary system has to expand to represent new productive value as it is created; a fixed supply in a growing economy is deflationary by construction and moves wealth from later participants to earlier holders. By June 2026 about 19.86 million coins, 94.6 percent of all that will ever exist, had been mined, and the holdings are concentrated in a small number of addresses.

Why this is a consumer concern. Consumers, institutions and sovereigns who act on the United States government's designation of bitcoin as a store of value act on a misstatement of its monetary properties. When the expectation that holds the price reverses, the holder bears the whole loss; the designation carries no floor, no guarantee and no recovery, and the government has not undertaken to buy bitcoin at any price in defense of the reserve status it has declared.

The group's position: bitcoin is not a store of value, and its designation as one by the United States government is a material misrepresentation to consumers worldwide.

Consumer concern 3: Stablecoins are not monetary stability; they are the dollar's problems in digital form

On 18 July 2025 the Trump administration signed the GENIUS Act, the first federal framework for payment stablecoins, and stated that the Act would cement the dollar's reserve status by requiring issuers to hold United States Treasuries and dollar assets against their coins.

Why stablecoins are not stores of value. A stablecoin pegged to the dollar is the dollar system in digital form. Every structural exposure of the dollar, to the monetary decisions of its issuer, to debasement through deficit spending, and to sanctions and settlement infrastructure used as instruments of policy, passes whole to any instrument denominated in and redeemable for dollars. Holding a dollar stablecoin is holding a dollar with a second counterparty added.

Why the Act does not strengthen the dollar. A currency whose reserve status rests on rules requiring other instruments to hold it is dependent on those rules. The Act's reserve requirement creates demand for Treasuries by compulsion rather than by preference, supports the dollar's standing while the fiscal position beneath it continues on the same path, and leaves the eventual adjustment larger and faster than it would otherwise have been.

Why this is a consumer concern. A consumer who holds a dollar stablecoin as a stable instrument holds the dollar's full debasement path, the issuer's counterparty risk, and the jurisdiction of the United States government over both. The Act does not remove those exposures; it formalizes them and carries them into digital infrastructure.

The group's position: payment stablecoins pegged to the dollar are not stores of value and do not represent monetary stability, and their promotion as such to consumers worldwide is a material misrepresentation.

Consumer concern 4: First Generation Digital instruments are not Basel-compliant and cannot serve as institutional monetary assets

Cryptocurrencies and stablecoins, bitcoin and ether and every derivative built on their architectures, are First Generation Digital (FGD) instruments. FGD instruments do not qualify as high-quality liquid assets under the Basel III framework and cannot be used for regulatory capital by any institution operating under it. The Basel Committee on Banking Supervision's standard on cryptoasset exposures, published in December 2022, assigns unbacked cryptoassets and the stablecoins that fail its tests a risk weight of 1,250 percent, the highest in the framework.

Why this matters to consumers. The designation of bitcoin as a national reserve asset, the GENIUS Act, and the reduction of capital standards for United States banks together produce a contradiction: instruments that fail the international banking standards are promoted as reserve assets while the standards themselves are lowered. The institutions best placed to judge those instruments, the banks operating under Basel, do not treat them as monetary-grade assets; government policy invites consumers to do so.

Institutions outside the United States that hold dollar reserves see the same policy direction, and the movement of reserves is on the record: central banks bought more than 1,000 tonnes of gold in each of 2022, 2023 and 2024 and 863 tonnes in 2025, by the World Gold Council's count, against an average near 500 tonnes a year in the decade before.

The group's position: First Generation Digital instruments are not Basel-compliant monetary assets; their promotion as institutional monetary equivalents misstates their regulatory, structural and material status; and the reduction of Basel standards in the United States compounds the misstatement by weakening the framework in which the non-compliance is most visible.

Public notice: the Digitized Tangible Asset is not a stablecoin and is not subject to the GENIUS Act

Where the instruments above are the first generation, a token referencing a price, the Digitized Tangible Asset™ is the second: value recognized in the asset itself and held in its own count. A Digitized Tangible Asset (DTA™) is a digitized bearer instrument, used for the creation of capital, or settlement in a walled garden ledger system, exercised solely by licensed regulated financial institutions who operate independently but cooperatively within a whole-asset based correspondent global network of like-minded institutions.

The GENIUS Act defines a payment stablecoin as a digital asset that its issuer must redeem at a fixed value, pegged to a national currency and backed one for one by dollar-denominated reserve assets. The DTA meets no part of that definition. The DTA is pegged to no currency. The value the DTA carries is recognized once, by Alkaimi™'s value recognition method, from a verified tangible asset and is held in the ecosystem's own count, the Universal Value Unit™, outside any currency and outside any sovereign's monetary decision. The DTA is backed by no Treasury security, no dollar and no dollar-denominated asset; the DTA is backed by the specific recognized asset in its stack. The Act prohibits a stablecoin issuer from paying interest or yield; the DTA is tangible asset value, custodial held, by Alkaimi Financial Ecosystem members only, as property, as a digitized bearer instrument, on the Alkaimi Financial Ecosystem ledger and carries no issuer's promise and no yield from any issuer, so the prohibition has nothing to reach. The recognition that stands behind each DTA is signed by an underwriter under suretyship.

The legal position is a jurisdictional fact and not a characterization. The DTA is not a security, not a currency or e-money, not a currency deposit and not a collective investment scheme; no listing, no licensing and no approval applies to the DTA, because the DTA is none of the things those regimes govern. The framework under which the DTA is issued, the law of negotiable and bearer instruments, predates every piece of cryptocurrency legislation enacted by any government, and the GENIUS Act neither amends nor reaches it. The DTA is created and settled inside the existing regulated banking system, by licensed banks under their own regulators, and not alongside that system or against it.

Public notice of intellectual property rights

The Pegisai group holds the intellectual property relevant to the tokenization of data on peer-to-peer networks, digital monetary mechanisms and related technologies, licensed within the group by territory. The group placed on public record, in warnings dated 10 April 2022, 20 April 2022 and 20 November 2022, that the peer-to-peer network architecture underlying bitcoin and its derivative instruments incorporates intellectual property belonging to the group, used without license, without compensation and without acknowledgment.

The Strategic Bitcoin Reserve, the designation of bitcoin as a national reserve asset, the GENIUS Act's framework for stablecoins built on related architectures, and the disbanding of the Department of Justice's National Cryptocurrency Enforcement Team by the Deputy Attorney General's memorandum of 7 April 2025 extend and amplify the use of that intellectual property, and remove an enforcement office that had been accumulating the evidentiary record relevant to these matters.

Nothing in this warning, in any prior warning or in the group's public communications constitutes a waiver, abandonment or license of any intellectual property right. All rights are expressly reserved. This warning is public notice of those rights in connection with the policy actions identified above and is intended to be relied upon as such in any subsequent legal proceeding.

Notice

This warning is issued by Pegisai Global Holdings for the Pegisai group of companies, as the holder of intellectual property relevant to the matters described and as a party with an interest in the integrity of the global monetary system and the protection of consumers from misstatements of monetary instrument properties. The warning is provided as a matter of public record, subject to the confidentiality obligations and regulatory constraints applicable to the group's operations. Nothing in this warning is legal, financial or investment advice; readers should obtain independent counsel in their own jurisdictions.

Sources: Federal Reserve, FDIC and OCC joint release and notices of proposed rulemaking, 19 March 2026; Federal Reserve staff memorandum of the same date as reported by the ABA Banking Journal; Congressional Budget Office, Monthly Budget Review for fiscal year 2025 and the Budget and Economic Outlook 2026 to 2036, with the August 2026 revision; Executive Order of 6 March 2025 establishing the Strategic Bitcoin Reserve; the GENIUS Act, signed 18 July 2025; on-chain supply data as of June 2026; Basel Committee on Banking Supervision, Prudential treatment of cryptoasset exposures, December 2022; World Gold Council, Gold Demand Trends, full year 2025; Department of Justice memorandum of 7 April 2025.