Leveraged Dogecoin? Not in the Banking System, Please: Editorial

Dogecoin isn’t an asset in any reasonable sense. It represents no investment in, or claim upon, real economic activity. The speculation that has pushed its notional market capitalization beyond $20 billion — and that of all pure cryptocurrencies, including Bitcoin, to more than $2 trillion — is a social phenomenon that could end as suddenly as it arose.

Lending actual dollars against such things would be hazardous at best — and at worst provide the leverage needed to turn the next market crash into a full-blown crisis. Yet if new proposals from the finance industry are adopted, that’s exactly what ...