Because the world shifts from a U.S.-dominated unipolar order to a multipolar panorama led by BRICS nations, the U.S. greenback faces unprecedented strain from declining bond demand and rising debt prices. The Genius Act, passed in July 2025, indicators a daring U.S. technique to counter this by legalizing Treasury-backed stablecoins, unlocking billions in overseas demand for U.S. bonds.
The blockchain internet hosting these stablecoins will form the worldwide financial system for many years. Bitcoin, with its unmatched decentralization, Lightning Network privateness, and strong safety, emerges because the superior option to energy this digital greenback revolution, making certain low switching prices when fiat inevitably fades. This essay explores why the greenback should and can grow to be digitized through blockchains and why Bitcoin should grow to be its rails for the U.S. financial system to have a gentle touchdown from the highs of being a world empire.
Finish of the Unipolar World
You may need heard that the world is transitioning from a unipolar world order — the place america was the one superpower and will make or break markets and dominate conflicts throughout the globe — to a multipolar world, the place a union of Japanese-allied nations can manage regardless of U.S. overseas coverage. This japanese alliance known as BRICS and is made up of main nations like Brazil, Russia, China and India. The inevitable consequence of the rise of BRICS is the restructuring of geopolitics, posing a problem to the hegemony of the U.S. greenback system.
There are various apparently remoted information factors that sign this restructuring of the world order. Take, for instance, america’ navy alliance with a rustic like Saudi Arabia. The U.S. is now not defending the petrodollar agreement, which noticed Saudi oil bought just for {dollars} in change for navy protection of the area. The petrodollar technique was a significant supply of demand for the greenback and was thought of pivotal to the power of the U.S. financial system for the reason that ’70s, however has successfully ended lately — at the very least for the reason that begin of the Ukraine conflict, when Saudi Arabia began accepting currencies other than the dollar for oil-related trades.
The Weakening of the U.S. Bond Market
One other crucial information level within the geopolitical change of the world order is the weakening of the U.S. bond market. Doubts in regards to the long-term creditworthiness of the U.S. authorities are rising. Some have considerations in regards to the nation’s inner political instability, whereas others are skeptical that the present authorities construction can adapt to the quickly altering, high-tech world and the rise of BRICS.
Elon Musk, reportedly the richest man on the planet and arguably the simplest CEO in historical past, able to working a number of seemingly unattainable firms concurrently — comparable to SpaceX, Tesla, The Boring Firm and X.com — is one in all these skeptics. Musk just lately spent months with the Trump administration determining the best way to restructure the federal authorities and the nation’s monetary place through DOGE, the Division Of Authorities Effectivity, earlier than an abrupt exit from politics in Could.
Musk just lately shocked the web in an All-In Summit look the place he commented on his expertise on the matter, saying, “I haven’t been to DC since Could. The federal government is mainly unfixable. I applaud David (Sacks’) noble efforts… however on the finish of the day, for those who take a look at our nationwide debt.. .if AI and robots don’t resolve our nationwide debt, we’re toast.”
If Elon Musk can’t get the U.S. authorities to pivot away from monetary doom, who can?
Doubts of this type are mirrored within the low demand for long-term U.S. bonds, as evidenced by the necessity for greater rates of interest to draw buyers. Immediately, the US30Y is at 4.75%, a 17-year excessive. Demand in long-dated auctions of U.S. bonds, just like the US30Y, has additionally trended downward with “disappointing” demand in 2025, according to Reuters.
The weakening demand for long-dated U.S. bonds has vital penalties for the U.S. financial system. The U.S. Treasury has to supply greater rates of interest to entice buyers, in flip rising the funds the U.S. authorities has to make on the curiosity of the nationwide debt. Immediately, the U.S. curiosity funds are near one trillion dollars a year, greater than the entire military budget of the nation.
If america fails to seek out sufficient patrons for its future debt, it could battle to pay its fast payments, having to rely as an alternative on the Fed to purchase that debt, which expands its steadiness sheet and the cash provide. The results, although advanced, would doubtless be inflationary on the greenback, additional harming the U.S. financial system.
How Sanctions Wounded the Bond Market
Additional weakening the U.S. bond market, in 2022, america manipulated the U.S.-controlled bond market rails towards Russia in response to its invasion of Ukraine. Because the Russians invaded, the U.S. froze Russian treasury reserves held abroad, which have been meant partially to pay its nationwide debt to Western buyers. In what seems to be like an try and power Russia right into a default, the U.S. additionally reportedly started blocking all makes an attempt made by Russia to repay its personal debt to overseas bondholders.
A U.S. Treasury spokeswoman confirmed at the time that sure funds have been now not being allowed.
“Immediately is the deadline for Russia to make one other debt cost,” the spokeswoman mentioned.
“Starting at present, the U.S. Treasury is not going to allow any greenback debt funds to be comprised of Russian authorities accounts at U.S. monetary establishments. Russia should select between draining remaining precious greenback reserves or new income coming in, or default.”
The U.S. successfully weaponized the bond market towards Russia by means of a novel use of its overseas coverage sanctions regime. However sanctions are a double-edged sword: Since then, overseas demand for U.S. bonds has weakened as nations not aligned with U.S. overseas coverage seemed to diversify their danger. China has led this trend away from U.S. bonds, its holdings peaked in 2013 at over 1.25 trillion {dollars} and has accelerated downward for the reason that starting of the Ukraine conflict, sitting at present at near 750 billion.
Whereas this occasion demonstrated the devastating effectiveness of sanctions, it additionally deeply wounded confidence within the bond market. Not solely was Russia blocked from paying off its money owed underneath the Biden administration sanctions, additionally harming buyers as collateral harm, however the freezing of its overseas treasury reserves confirmed the world that for those who, as a sovereign nation, go towards U.S. overseas coverage, all bets are off — and that features the bond market.
Following the debatable overreach of sanctions from the earlier administration, the Trump admin has backed off from sanctions as a method, since they hurt the U.S. monetary sector, and pivoted to a tariff-based strategy to overseas coverage. These tariffs thus far have had combined outcomes. Whereas the Trump administration boasts record revenue and infrastructure investments by the personal sector within the nation, Japanese nations have accelerated their collaboration through the BRICS alliance.
The current SCO summit in Tianjin, China, introduced collectively world leaders, together with Chinese language President Xi Jinping, Russian President Vladimir Putin and Prime Minister of India Narendra Modi, amongst others. Probably the most notable information to come back out of the SCO summit was a joint pledge by India and China to be “partners not rivals,” an extra step towards the multipolar world order.
The Stablecoin Playbook
Whereas China has divested from U.S. bonds previously decade, a brand new purchaser has emerged, shortly coming into the highest echelons of energy. Tether, a monetary expertise firm born within the early days of Bitcoin and initially constructed on high of its community by means of the Mastercoin layer-two protocol, at present owns $171 billion worth of U.S. bonds, near 1 / 4 of the quantity China owns and greater than most different nations.
Tether is the issuer of the most well-liked stablecoin, USDT, with a market cap of 171 billion {dollars} in worth in circulation, equal to its reported bond holdings. The corporate reported $1 billion in profits for Q1 of 2025, with a easy but good enterprise mannequin: purchase short-dated U.S. bonds, emit USDT tokens backed 1-for-1, and pocket the coupon curiosity funds from the U.S. authorities. With 100 workers at first of the 12 months, Tether is alleged to be one of the crucial worthwhile firms per worker on the planet.
Circle, the issuer of USDC and the second-most standard stablecoin available in the market, additionally holds near $50 billion in short-dated treasuries. Stablecoins are used all around the world, significantly in Latin America and creating nations, as an alternative choice to native fiat currencies, which endure far deeper inflation than the greenback and are sometimes hindered by capital controls.
The quantity processed by stablecoins at present is past a distinct segment, nerd monetary toy; it’s within the trillions of {dollars}. A 2025 Chainalysis report states, “Between June 2024 and June 2025, USDT processed over $1 trillion per thirty days, peaking at $1.14T in January 2025. USDC, in the meantime, ranged from $1.24T to $3.29T month-to-month. These volumes spotlight the continued centrality of Tether and USDC in crypto market infrastructure, particularly for cross-border funds and institutional exercise.”
Latin America, for instance, accounted for 9.1% of whole crypto worth obtained between 2023 and 2024, with year-to-year utilization progress charges of 40-100%, of which over 50% have been stablecoins, in response to a 2024 Latin America-focused report by Chainalysis, demonstrating the robust demand for various currencies within the creating world.
The U.S. wants new demand for its bonds, and that demand exists within the type of demand for the greenback, on condition that most individuals all through the world are locked into fiat currencies which can be far inferior to these of america. If the world transitions to a geopolitical construction that forces the greenback to compete on even phrases with all different fiat currencies, it nonetheless could proceed to be the perfect amongst them. The US, for all its faults, stays a superpower, with unimaginable wealth, human capital and financial potential, significantly when in comparison with many smaller nations and their questionable pesos.
Latin America has demonstrated a deep starvation for the greenback, however there’s a provide drawback as native nations resist legacy banking greenback rails. Gaining access to dollar-denominated accounts in lots of nations outdoors of america just isn’t straightforward. Native banks are sometimes tightly regulated and serve on the behest of native governments, who even have an curiosity in defending their peso. The U.S. just isn’t the one authorities that understands the worth of printing cash and defending its worth, in any case.
Stablecoins, leveraging the censorship-resistant qualities of their underlying blockchains, can present people believable deniability and privateness from their native state, a function that native banks can not present. Consequently, the U.S., by means of the promotion of stablecoins, can entry overseas markets it has but to succeed in, increasing its demand and consumer base, whereas additionally exporting greenback inflation to nations that wouldn’t have a direct affect on American politics — a protracted custom within the historical past of the USD. From a strategic perspective, this sounds very best for america, and it’s a easy extension of how the USD has labored for many years, simply on high of latest monetary expertise.
The U.S. authorities understands this chance. In response to Chainalysis, “The stablecoin regulatory landscape has developed considerably over the previous 12 months. Whereas the GENIUS Act in the U.S. (which legalized U.S. bond-backed stablecoins) has not but taken impact, its passage has pushed robust institutional curiosity.”
Why Stablecoins Ought to Journey On High of Bitcoin
The easiest way to verify Bitcoin advantages from the elevation of the creating world out of mediocre fiat currencies is to verify the greenback makes use of Bitcoin as its rails. Each greenback stablecoin pockets must be a Bitcoin pockets as effectively.
Critics of the Bitcoin greenback technique will say that it goes towards Bitcoin’s libertarian roots, that Bitcoin was supposed to exchange the greenback — not improve it or convey it into the twenty first century. Nonetheless, this concern is essentially U.S.-centric. It’s straightforward to sentence the greenback whenever you receives a commission in {dollars} and your financial institution accounts are denominated in USD. It’s straightforward to critique a 2-8% greenback inflation price (relying on the way you measure it) when that’s your native foreign money. In too many nations outdoors of the U.S., 2-8% yearly inflation could be a blessing.
A big portion of the inhabitants of the world suffers from fiat currencies far worse than the greenback, with inflation charges within the low-to-high double digits and even triple digits, which is why stablecoins have already gained large adoption all through the third world. The creating world must get off the sinking ship first. The hope is that when they’re on a steady boat, they could begin trying round for tactics to improve to the Bitcoin yacht.
Sadly, most stablecoins are not on top of Bitcoin today, regardless of having began on Bitcoin, a technical actuality that may be a massive supply of friction and danger for customers. Nearly all of the stablecoin quantity at present runs on the Tron blockchain, which is a centralized community run on a handful of servers by Justin Solar, a Chinese language nationwide who will be simply focused by overseas states that detest the unfold of greenback stablecoins inside their borders.
Many of the blockchains on high of which stablecoins transfer at present are additionally completely clear. Public addresses, which function account numbers for his or her customers, are publicly trackable, typically linked by native exchanges to the consumer’s private information, and simply accessible by native governments. That’s a lever overseas nations can use to push again on the unfold of dollar-denominated stablecoins.
Bitcoin doesn’t have these infrastructure dangers. Not like Ethereum, Tron, Solana, and many others., Bitcoin is extremely decentralized, with tens of hundreds of copies of itself all through the world and a sturdy peer-to-peer community used to transmit transactions in a means that may simply route round any bottlenecks or choke factors. Its proof-of-work layer supplies a separation of powers that different proof-of-stake blockchains wouldn’t have. Michael Saylor, for instance, regardless of his large stack of bitcoins, 3% of the total supply, doesn’t have a direct vote on the consensus politics of the community. The identical can’t be mentioned for Vitalik, and the proof-of-stake consensus politics of Ethereum, or Justin Solar and Tron.
Moreover, the Lightning Community on high of Bitcoin unlocks immediate transaction settlement, which advantages from Bitcoin’s underlying blockchain safety. Whereas additionally offering customers vital privateness, as all Lightning Community transactions are off-chain by design, and don’t depart an everlasting footprint on its public blockchain. This elementary distinction in strategy to funds grants customers privateness from these they ship cash to, in addition to from third-party observers who don’t run Lightning wallets or high-liquidity Lightning nodes. This reduces the variety of menace actors that may invade consumer privateness from anybody who seems like trying on the blockchain, to a handful of extremely competent entrepreneurs and expertise companies, at worst.
Customers may also run their own Lightning nodes locally and select how they connect with the community, and loads of individuals do, taking their privateness and safety into their very own arms. None of those qualities will be seen within the blockchains that most individuals use for stablecoins at present.
Compliance insurance policies and even sanctions may nonetheless be utilized to greenback stablecoins, their governance anchored to Washington, with the identical analytics and smart-contract-based approaches used at present to cease felony use of stablecoins. There’s no elementary technique to decentralize one thing just like the greenback; in any case, it’s centralized by design. Nonetheless, if many of the stablecoin worth have been to be transferred over the Lightning Community as an alternative, consumer privateness may be maintained, defending customers in creating nations from organized crime and even their local governments.
In the end, what customers care about is transaction charges — the price of transferring their cash round — which is why Tron has dominated the market thus far. Nonetheless, with USDT coming on-line on high of the Lightning Community, that would quickly change. Within the Bitcoin dollar world order, the Bitcoin community would grow to be the medium of change of the greenback, whereas the greenback would stay, for the foreseeable future, because the unit of account.
Can Bitcoin Survive This?
Critics of this technique are additionally involved in regards to the affect the Bitcoin greenback technique could have on Bitcoin itself. They surprise if placing the heavy incentives of the greenback on high of Bitcoin can distort its underlying construction. The obvious means by which a superpower just like the U.S. authorities would possibly wish to manipulate Bitcoin is to bend it into compliance with sanctions regimes, one thing they might theoretically do on the proof-of-work layer.
Nonetheless, as mentioned earlier, the sanctions regime has arguably already peaked, giving technique to the period of tariffs, which search to manage the circulate of products moderately than the circulate of funds. This post-Trump, post-Ukraine conflict shift in U.S. overseas coverage technique really relieves strain off Bitcoin.
https://bitcoinmagazine.com/tradition/the-birth-of-the-bitcoin-dollar
Moreover, as main Western firms, comparable to BlackRock, and even the U.S. authorities, proceed to undertake bitcoin as long-term investments, or, within the phrases of President Donald J. Trump, a “Strategic Bitcoin Reserve,” they too begin to align with the longer term success and survival of the Bitcoin community. Attacking Bitcoin’s censorship resistance qualities wouldn’t solely undermine their funding within the asset however would additionally weaken the community’s capability to ship stablecoins to the creating world.
The obvious compromise that Bitcoin must make within the Bitcoin greenback world order is to surrender the unit of account dimension of cash. That is unhealthy information for a lot of Bitcoiners, and rightfully so. Unit of account is the mecca of hyperbitcoinization, and plenty of of its customers dwell in that world at present, as they calculate their financial selections based mostly on the final word affect on the quantity of sats they maintain. Nonetheless, nothing can actually take that away from those that perceive Bitcoin as probably the most sound cash to have ever existed. In actual fact, the conviction of Bitcoin as a retailer of worth and a medium of change will likely be strengthened with this Bitcoin greenback technique.
Sadly, after 16 years of makes an attempt to make bitcoin a unit of account as ubiquitous because the greenback, some are recognizing that within the medium time period, the greenback and stablecoins will doubtless fulfill that use case. Bitcoin funds won’t ever go away, and bitcoiner-led firms will proceed to rise and may proceed to simply accept bitcoin as cost to construct up their bitcoin treasuries — however stablecoins and dollar-denominated worth will doubtless dominate crypto commerce within the coming a long time.
Nothing Stops This Prepare
Because the world continues to adapt to the rising powers within the east and the emergence of the multipolar world order, america will doubtless should make troublesome and pivotal selections to keep away from a long-lasting monetary disaster. The nation may, in principle, decrease its spending, pivot, and restructure to be able to grow to be extra environment friendly and aggressive within the twenty first century. And the Trump administration is definitely making an attempt to do exactly that, as seen by the tariff regime and different associated efforts, which try and convey again manufacturing of important industries into america and bolster its native expertise. Nonetheless, within the now legendary phrases of Lyn Alden, nothing stops this train.
Whereas there are a number of miracles that maybe may resolve america’ monetary woes, such because the science-fiction-like automation of labor and intelligence, and even the Bitcoin greenback technique, finally, even placing the greenback on the blockchain received’t change its destiny: to grow to be a collectible for historical past buffs, a rediscovered token of an historic empire match for a museum.
The greenback’s centralized design and dependence on American politics finally doom the greenback as a foreign money, but when we’re lifelike, its demise won’t be seen for an additional 10, 50 and even 100 years. When the time does come, if historical past repeats, Bitcoin must be there because the rails, prepared to select up the items and fulfill the prophecy of hyperbitcoinization.
BM Big Reads are weekly, in-depth articles on some present matter related to Bitcoin and Bitcoiners. Opinions expressed are these of the authors and don’t essentially mirror these of BTC Inc or Bitcoin Journal. In case you have a submission you suppose suits the mannequin, be at liberty to succeed in out at editor[at]bitcoinmagazine.com.
