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 stress from declining bond demand and rising debt prices. The Genius Act, handed in July 2025, alerts a daring U.S. technique to counter this by legalizing Treasury-backed stablecoins, unlocking billions in international 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 Community privateness, and sturdy safety, emerges because the superior option to energy this digital greenback revolution, guaranteeing low switching prices when fiat inevitably fades. This essay explores why the greenback should and can develop into digitized through blockchains and why Bitcoin should develop into 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 might need heard that the world is transitioning from a unipolar world order — the place the US 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 international locations can set up regardless of U.S. international coverage. This jap alliance is known as BRICS and is made up of main international locations 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, the US’ navy alliance with a rustic like Saudi Arabia. The U.S. is not defending the petrodollar settlement, which noticed Saudi oil bought just for {dollars} in alternate 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 energy of the U.S. financial system for the reason that ’70s, however has successfully ended lately — a minimum of for the reason that begin of the Ukraine battle, when Saudi Arabia started accepting currencies aside from the greenback for oil-related trades.
The Weakening of the U.S. Bond Market
One other essential 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 issues 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 earth and arguably the simplest CEO in historical past, able to working a number of seemingly unimaginable corporations concurrently — similar to SpaceX, Tesla, The Boring Firm and X.com — is considered one of these skeptics. Musk just lately spent months with the Trump administration determining methods 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 Might.
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 Might. The federal government is mainly unfixable. I applaud David (Sacks’) noble efforts… however on the finish of the day, for those who have a look at our nationwide debt.. .if AI and robots don’t remedy 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 kind 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. At present, 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, in keeping with 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 growing the funds the U.S. authorities has to make on the curiosity of the nationwide debt. At present, the U.S. curiosity funds are shut to 1 trillion {dollars} a yr, greater than the entire navy funds of the nation.
If the US fails to seek out sufficient consumers for its future debt, it could wrestle 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 consequences, 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, the US manipulated the U.S.-controlled bond market rails in opposition to Russia in response to its invasion of Ukraine. Because the Russians invaded, the U.S. froze Russian treasury reserves held abroad, which have been supposed partially to pay its nationwide debt to Western buyers. In what appears to be like like an try to drive 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 international bondholders.
A U.S. Treasury spokeswoman confirmed on the time that sure funds have been not being allowed.
“At present is the deadline for Russia to make one other debt cost,” the spokeswoman mentioned.
“Starting in the present day, the U.S. Treasury won’t allow any greenback debt funds to be constituted of Russian authorities accounts at U.S. monetary establishments. Russia should select between draining remaining invaluable greenback reserves or new income coming in, or default.”
The U.S. successfully weaponized the bond market in opposition to Russia by means of a novel use of its international coverage sanctions regime. However sanctions are a double-edged sword: Since then, international demand for U.S. bonds has weakened as nations not aligned with U.S. international coverage regarded to diversify their threat. China has led this development 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 battle, sitting in the present day 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 injury, however the freezing of its international treasury reserves confirmed the world that for those who, as a sovereign nation, go in opposition to U.S. international coverage, all bets are off — and that features the bond market.
Following the controversial 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 international coverage. These tariffs to date have had combined outcomes. Whereas the Trump administration boasts file income and infrastructure investments by the non-public sector within the nation, Japanese nations have accelerated their collaboration by means of 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 “companions not rivals,” an additional step towards the multipolar world order.
The Stablecoin Playbook
Whereas China has divested from U.S. bonds prior to now decade, a brand new purchaser has emerged, rapidly getting into the highest echelons of energy. Tether, a monetary expertise firm born within the early days of Bitcoin and initially constructed on prime of its community by means of the Mastercoin layer-two protocol, in the present day owns $171 billion price of U.S. bonds, near 1 / 4 of the quantity China owns and greater than most different international locations.
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 earnings for Q1 of 2025, with a easy but sensible 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 in the beginning of the yr, Tether is claimed to be some of the worthwhile corporations per worker on the earth.
Circle, the issuer of USDC and the second-most in style stablecoin out there, additionally holds near $50 billion in short-dated treasuries. Stablecoins are used all around the world, significantly in Latin America and creating nations, as a substitute for native fiat currencies, which undergo far deeper inflation than the greenback and are sometimes hindered by capital controls.
The quantity processed by stablecoins in the present day 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 development charges of 40-100%, of which over 50% have been stablecoins, in keeping with a 2024 Latin America-focused report by Chainalysis, demonstrating the robust demand for different 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, provided that most individuals all through the world are locked into fiat currencies which can be far inferior to these of the US. If the world transitions to a geopolitical construction that forces the greenback to compete on even phrases with all different fiat currencies, it nonetheless might proceed to be the most effective amongst them. America, for all its faults, stays a superpower, with unbelievable wealth, human capital and financial potential, significantly when in comparison with many smaller international locations and their questionable pesos.
Latin America has demonstrated a deep starvation for the greenback, however there’s a provide downside as native nations resist legacy banking greenback rails. Gaining access to dollar-denominated accounts in lots of international locations outdoors of the US isn’t simple. 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. isn’t the one authorities that understands the worth of printing cash and defending its worth, in spite of everything.
Stablecoins remedy each issues; they create demand for U.S. bonds and may ship dollar-denominated worth to everybody, anyplace on the earth, regardless of the pursuits of their native governments.
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. Because of this, the U.S., by means of the promotion of stablecoins, can entry international markets it has but to achieve, increasing its demand and person base, whereas additionally exporting greenback inflation to nations that shouldn’t have a direct affect on American politics — an extended custom within the historical past of the USD. From a strategic perspective, this sounds supreme for the US, and it’s a easy extension of how the USD has labored for many years, simply on prime of latest monetary expertise.
The U.S. authorities understands this chance. In line with Chainalysis, “The stablecoin regulatory panorama has developed considerably over the previous 12 months. Whereas the GENIUS Act within 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 Trip On Prime of Bitcoin
One of the best ways 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 properly.
Critics of the Bitcoin greenback technique will say that it goes in opposition to Bitcoin’s libertarian roots, that Bitcoin was supposed to exchange the greenback — not improve it or deliver it into the twenty first century. Nonetheless, this concern is basically U.S.-centric. It’s simple to sentence the greenback if you receives a commission in {dollars} and your financial institution accounts are denominated in USD. It’s simple to critique a 2-8% greenback inflation charge (relying on the way you measure it) when that’s your native forex. In too many international locations 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 secure boat, they could begin wanting round for methods to improve to the Bitcoin yacht.
Sadly, most stablecoins usually are not on prime of Bitcoin in the present day, regardless of having began on Bitcoin, a technical actuality that could be a massive supply of friction and threat for customers. The vast majority of the stablecoin quantity in the present day runs on the Tron blockchain, which is a centralized community run on a handful of servers by Justin Solar, a Chinese language nationwide who might be simply focused by international states that detest the unfold of greenback stablecoins inside their borders.
A lot of the blockchains on prime of which stablecoins transfer in the present day are additionally completely clear. Public addresses, which function account numbers for his or her customers, are publicly trackable, usually linked by native exchanges to the person’s private information, and simply accessible by native governments. That’s a lever international nations can use to push again on the unfold of dollar-denominated stablecoins.
Bitcoin doesn’t have these infrastructure dangers. In contrast to Ethereum, Tron, Solana, and many others., Bitcoin is extremely decentralized, with tens of 1000’s of copies of itself all through the world and a strong peer-to-peer community used to transmit transactions in a approach 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 shouldn’t have. Michael Saylor, for instance, regardless of his large stack of bitcoins, 3% of the whole provide, doesn’t have a direct vote on the consensus politics of the community. The identical cannot be mentioned for Vitalik, and the proof-of-stake consensus politics of Ethereum, or Justin Solar and Tron.
Moreover, the Lightning Community on prime of Bitcoin unlocks prompt 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 risk actors that may invade person privateness from anybody who appears like wanting on the blockchain, to a handful of extremely competent entrepreneurs and expertise companies, at worst.
Customers can even run their very own Lightning nodes domestically and select how they hook up with the community, and loads of individuals do, taking their privateness and safety into their very own fingers. None of those qualities might be seen within the blockchains that most individuals use for stablecoins in the present day.
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 in the present day to cease legal use of stablecoins. There’s no elementary technique to decentralize one thing just like the greenback; in spite of everything, it’s centralized by design. Nonetheless, if a lot of the stablecoin worth have been to be transferred over the Lightning Community as an alternative, person privateness may be maintained, defending customers in creating nations from organized crime and even their native governments.
Finally, what customers care about is transaction charges — the price of transferring their cash round — which is why Tron has dominated the market to date. Nonetheless, with USDT coming on-line on prime of the Lightning Community, that would quickly change. Within the Bitcoin greenback world order, the Bitcoin community would develop into the medium of alternate 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 influence the Bitcoin greenback technique might have on Bitcoin itself. They marvel if placing the heavy incentives of the greenback on prime of Bitcoin can distort its underlying construction. The obvious approach wherein 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 regulate the movement of products somewhat than the movement of funds. This post-Trump, post-Ukraine battle shift in U.S. international coverage technique really relieves stress off Bitcoin.
https://bitcoinmagazine.com/tradition/the-birth-of-the-bitcoin-dollar
Moreover, as main Western firms, similar 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 lots of of its customers reside in that world in the present day, as they calculate their financial selections primarily based on the final word influence on the quantity of sats they maintain. Nonetheless, nothing can actually take that away from those that perceive Bitcoin as essentially the most sound cash to have ever existed. In reality, the conviction of Bitcoin as a retailer of worth and a medium of alternate might be bolstered 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 corporations 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 Practice
Because the world continues to adapt to the rising powers within the east and the emergence of the multipolar world order, the US will doubtless need to make tough and pivotal selections to keep away from a long-lasting monetary disaster. The nation may, in concept, decrease its spending, pivot, and restructure with a view to develop into 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 to deliver again manufacturing of important industries into the US and bolster its native expertise. Nonetheless, within the now legendary phrases of Lyn Alden, nothing stops this prepare.
Whereas there are a number of miracles that maybe may remedy the US’ 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 develop into 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 forex, but when we’re real looking, its demise may not be seen for one more 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 Huge 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 happy to achieve out at editor[at]bitcoinmagazine.com.
