The crypto market is experiencing a rise in adoption, with assets reaching record highs. Furthermore, stablecoins have emerged as a cornerstone of this expansion and have proven to be the backbone of the real-world economy.
However, Christopher Perkins, President of CoinFund, cautions that ‘security’ remains the largest risk to the rising stablecoin momentum. In an exclusive interview with BeInCrypto, Perkins advocated for a ‘neo-privateer program.’ He discussed how adopting this could be the best defense against the next billion-dollar exploit.
Stablecoins Are Growing—But Are Hackers Winning the Race?
Stablecoin, assets pegged to fiat currency, have been thriving lately, and it’s not without reason. Adoption is driven by several key factors. These include efficiency, demand in unstable economies, increasing TradFi adoption, clearer regulatory frameworks, and cost and transparency benefits.
BeInCrypto recently reported that the number of wallets holding stablecoins has officially exceeded that of wallets holding Solana (SOL), highlighting the growing dominance.
Notably, many expect the stablecoin market to continue expanding. The US Department of the Treasury forecasts that the market cap could reach $2 trillion by 2028. Meanwhile, Citigroup predicts it could reach $3.7 trillion by 2030.
Despite the positive outlook, Christopher Perkins warns of the security risks, and it’s not just for stablecoins. Perkins noted the nearly $4 trillion crypto market also faces a similar challenge. Thus, enhancing security measures will become increasingly crucial as more value is moved on-chain.
“State and non-state sponsored criminal organizations are licking their chops as trillions in stablecoins enter the system,” he said.
Perkins noted that GENIUS Act-compliant stablecoins have built-in ‘freeze and seize’ capabilities. This allows authorities to confiscate reserves and burn tokens in illicit scenarios. Nonetheless, he stated that due process takes time, and hackers move much faster.
Furthermore, the executive highlighted that blockchains provide excellent forensics in the event of a hack, helping trace illicit activities. However, Perkins points out that sophisticated, often state-sponsored hackers continuously develop new techniques, which will be even more potent as AI and deepfakes become more advanced.
“In my opinion, we need a private sector solution. To me, the solution is a neo-privateering program that leverages the skill and sophistication of the private sector at little cost to the taxpayer. Said differently, the best defense…is a good offense,” he told BeInCrypto.
Is the Private Sector the Answer to Crypto’s Security Crisis? Perkins Thinks So
So, what does neo-privateering entail? Well, Perkins, who has written on the neo-privateer concept with Chris Giancarlo, Senior counsel at Willkie Farr & Gallagher, and former CFTC chairman, elaborated that it involves empowering agile startups and decentralized teams involved in crypto infrastructure building to swiftly target and seize assets or property from adversaries.
Perkins argued that these teams are essential for advancing the adoption of crypto technologies and safeguarding national security.
“Privateers played a crucial role in the American victory during the Revolutionary War. Our Founding Fathers valued privateering so much that they enshrined the practice in Article I of the Constitution, authorizing the Congress to issue “Letters of Marque and Reprisal,” he commented.
The CoinFund president advocated for a revival of the ‘privateer mindset,’ in which the private sector takes a proactive role in securing and expanding the crypto space.
“Today, a neo-privateer program could be used to restore security across the crypto space. By leveraging the sophistication of the private sector, neo-privateers can go on offense against designated adversaries by proactively hacking and seizing assets from illicit actors. By extending a security umbrella patrolled by neo-privateers, crypto entrepreneurs will return to the United States,” he disclosed to BeInCrypto.
Neo-Privateering: A Cost-Effective Solution to Crypto Security
The executive also stressed that it is both costly and challenging for governments to recruit and retain talent capable of competing with well-funded, state-backed entities. Thus, neo-privateering solves this problem.
“In the US, perhaps the original public-private partnership, Privateers could provide a solution at little taxpayer expense. In fact, seized assets could also help fund the strategic Bitcoin reserve,” he remarked.
While all this sounds quite beneficial, privateering also raises ethical concerns. Perkins emphasized that privateers were required to post a bond historically. This could be forfeited if they violated their authorized actions.
A modern version of this approach could involve privateers ‘staking’ assets to ensure accountability. Blockchain technology offers clear, traceable records of activities, making it easier to monitor privateers and ensure their actions align with any issued letter of marque.
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