The rise of stablecoins, can Bitcoin's "currency payment dream" still be realized?

*Author: *Juan Galt, original translation by: AididiaoJP, Foresight News

As the GENIUS Act solidifies the status of stablecoins backed by US Treasury bonds, the decentralized network of Bitcoin makes it more suitable for global adoption of blockchain, responding to the trend of declining demand for US bonds in a multipolar world.

As the world shifts from a U.S.-led unipolar order to a multipolar landscape led by BRICS nations, the dollar faces unprecedented pressure due to declining bond demand and rising debt costs. The GENIUS Act, passed in July 2025, marks a bold strategy by the U.S. to address this situation by legislating the recognition of stablecoins backed by U.S. Treasury bonds, thereby releasing the massive overseas demand for U.S. bonds.

The blockchain that carries these stablecoins will shape the global economy for decades to come. Bitcoin, with its unparalleled decentralization, the privacy of the Lightning Network, and robust security, has become the superior choice to drive this digital dollar revolution, ensuring lower conversion costs when fiat currencies inevitably decline. This article explores why the dollar must and will be digitized through blockchain, and why Bitcoin must become its operational track for the U.S. economy to achieve a soft landing from the heights of a global empire.

The End of the Unipolar World

The world is transitioning from a unipolar world order (where the United States was the only superpower capable of influencing markets and dominating global conflicts) to a multipolar world, in which Eastern alliances can organize themselves independently of U.S. foreign policy. This Eastern alliance is known as the BRICS, consisting of major countries such as Brazil, Russia, China, and India. The inevitable result of the rise of BRICS is a geopolitical restructuring that poses a challenge to the hegemony of the dollar system.

There are many seemingly isolated data points indicating a restructuring of this world order, such as the military alliance between the United States and Saudi Arabia. The United States no longer defends the petrodollar agreement, which stipulated that Saudi oil was sold only in dollars in exchange for U.S. military defense of the region. The petrodollar strategy has been a major source of demand for the dollar and has been considered a key to U.S. economic power since the 1970s, but it has effectively ended in recent years, at least since the start of the Ukraine war, during which Saudi Arabia has begun accepting currencies other than the dollar for oil-related trade.

The weakness of the U.S. bond market

Another key data point in the geopolitical changes of the world order is the weakness of the U.S. bond market, with growing skepticism about the long-term creditworthiness of the U.S. government. Some are concerned about political instability within the country, while others doubt whether the current government structure can adapt to the rapidly changing high-tech world and the rise of the BRICS countries.

It is said that Musk is one of the skeptics. Musk recently spent months working with the Trump administration to attempt to restructure the federal government and the country's financial situation through the Department of Efficiency, but suddenly withdrew from politics in May.

Elon Musk recently shocked the internet during an appearance at a summit, stating: “I haven't been to Washington since May. The government is basically hopeless. I appreciate David Sachs' noble efforts… but ultimately, if you look at our national debt… if artificial intelligence and robots can't solve our national debt problem, we're doomed.”

If even Musk cannot free the US government from financial misfortune, then who can?

These concerns are reflected in the low demand for U.S. long-term bonds, which is manifested in the need to raise interest rates to attract investors. Currently, the yield on the U.S. 30-year Treasury bond is at 4.75%, a 17-year high. According to Reuters, the auction demand for long-term bonds like the U.S. 30-year Treasury bond is also on a downward trend, with demand in 2025 being “disappointing.”

The weakening demand for U.S. long-term bonds has a significant impact on the U.S. economy. The U.S. Treasury must offer higher interest rates to attract investors, which in turn increases the interest payments on the national debt that the U.S. government has to make. Today, interest payments in the U.S. are approaching one trillion dollars a year, exceeding the entire military budget of the country.

If the United States fails to find enough buyers for its future debt, it may struggle to pay its current bills and may have to rely on the Federal Reserve to purchase this debt, which would expand its balance sheet and money supply. The effects, while complex, are likely to lead to dollar inflation, further harming the U.S. economy.

How Sanctions Devastated the Bond Market

Further weakening the U.S. bond market, in 2022 the U.S. manipulated its controlled bond market to deal with Russia in response to its invasion of Ukraine. When Russia invaded, the U.S. froze Russia's overseas treasury reserves, which were intended to be used to repay its national debt to Western investors. Reports indicate that to force Russia into default, the U.S. also began blocking all of Russia's attempts to repay its debts to foreign bondholders.

A female spokesperson for the U.S. Treasury Department confirmed at the time that certain payments were no longer allowed.

“Today is the deadline for Russia to make another debt payment,” the spokesperson said.

“Starting today, the U.S. Treasury will not allow any dollar debt payments from accounts held by the Russian government in U.S. financial institutions. Russia must choose to either deplete its remaining dollar reserves or find new sources of income, or default.”

The United States has effectively weaponized the bond market against Russia through its diplomatic sanction mechanisms. However, sanctions are a double-edged sword: since then, foreign demand for U.S. bonds has weakened as countries that do not align with U.S. foreign policy seek to diversify their risks. China has led this trend away from U.S. bonds, with its holdings peaking at over $1.25 trillion in 2013, and accelerating downward since the start of the Ukraine war, currently approaching $750 billion.

Although this incident demonstrates the devastating effectiveness of sanctions, it has also deeply harmed confidence in the bond market. Not only was Russia prevented from repaying its debts under the sanctions imposed by the Biden administration, but it also harmed investors as collateral damage. Additionally, freezing its foreign treasury reserves sends a message to the world that if you, as a sovereign nation, violate U.S. foreign policy, all bets are off, including in the bond market.

The Trump administration has no longer made sanctions the primary strategy, as they harm the U.S. financial sector, and has shifted to a tariff-based diplomatic policy approach. These tariffs have had mixed results so far. While the Trump administration boasts about record tax revenue and private sector infrastructure investment domestically, Eastern countries have expedited their cooperation through the BRICS alliance.

Stablecoin Strategy Handbook

Although China has reduced its holdings of U.S. bonds over the past decade, a new buyer has emerged, rapidly rising to the top tier of power. Tether, a fintech company that was born in the early days of Bitcoin, now holds $171 billion in U.S. bonds, close to a quarter of China's holdings and exceeding most other countries.

Tether is the issuer of the most popular stablecoin USDT, with a circulating market value of 171 billion dollars. The company reported a profit of 1 billion dollars in the first quarter of 2025, with a simple yet excellent business model: purchasing short-term U.S. Treasury bonds to back the issuance of USDT tokens on a 1:1 basis and pocketing the interest income from U.S. government bonds. At the beginning of the year, Tether had 100 employees and is said to be one of the companies with the highest profit per capita in the world.

Circle, the issuer of USDC, is also the second most popular stablecoin in the market, holding nearly $50 billion in short-term treasury bills. Stablecoins are used around the world, particularly in Latin America and developing countries, as an alternative to local fiat currencies, which suffer from much more severe inflation than the dollar and are often hindered by capital controls.

The trading volume handled by stablecoins is no longer a niche, geeky financial toy; it has reached trillions of dollars. A Chainalysis report from 2025 states: “Between June 2024 and June 2025, USDT processes over $1 trillion monthly, peaking at $1.14 trillion in January 2025. Meanwhile, USDC's monthly processing volume ranges from $1.24 trillion to $3.29 trillion. These trading volumes highlight the ongoing central role of Tether and USDC in the cryptocurrency market infrastructure, particularly in cross-border payments and institutional activities.”

For example, according to a Chainalysis report focusing on Latin America in 2024, Latin America accounted for 9.1% of the total cryptocurrency value received between 2023 and 2024, with an annual usage growth rate between 40% and 100%, of which over 50% is stablecoins, demonstrating a strong demand for alternative currencies in the developing world.

The United States needs new demand for its bonds, and this demand exists in the form of demand for the dollar, as most people in the world are trapped in fiat currencies that are far inferior to that of the United States. If the world shifts to a geopolitical structure that forces the dollar to compete on equal terms with all other fiat currencies, the dollar may still be the best among them. Despite its flaws, the United States remains a superpower with astonishing wealth, human capital, and economic potential, especially when compared to many small countries and their questionable pesos.

Latin America has shown a deep desire for the US dollar, but there are supply issues as local countries resist traditional banking dollar channels. In many countries outside the United States, obtaining dollar-denominated accounts is not easy. Local banks are often heavily regulated and are subject to the directives of local governments, which also have an interest in maintaining the value of their pesos. After all, the United States is not the only government that knows how to print money and maintain the value of its currency.

Stablecoins address these two issues; they create demand for U.S. bonds and are able to transmit dollar-denominated value to everyone, anywhere in the world.

Stablecoins leverage the censorship-resistant features of their underlying blockchain, which local banks cannot provide. Therefore, by promoting stablecoins, the United States can reach foreign markets that have yet to be accessed, expanding its demand and user base, while also exporting dollar inflation to countries that are not directly affected by U.S. politics, which is a long-standing tradition in the history of the dollar. From a strategic perspective, this sounds ideal for the United States and is simply an extension of the way the dollar has operated for decades, albeit built on new financial technologies.

The U.S. government understands this opportunity. According to Chainalysis, “The regulatory landscape for stablecoins has changed significantly over the past 12 months. While the U.S. GENIUS Act has not yet taken effect, its passage has sparked strong institutional interest.”

Why Stablecoins Should Surpass Bitcoin

The best way to ensure that Bitcoin escapes the mediocrity of fiat currency in the developing world is to ensure that the dollar uses Bitcoin as its operating track. Every dollar stablecoin wallet should also be a Bitcoin wallet.

Critics of the Bitcoin-dollar strategy argue that it contradicts the liberal roots of Bitcoin, which was supposed to replace the dollar, not enhance it or bring it into the 21st century. However, this concern is largely America-centric. It's easy to condemn the dollar when you're paid in dollars and your bank account is denominated in dollars. It's easy to criticize it when a 2-8% inflation rate of the dollar is your local currency. In too many countries outside the U.S., a 2-8% inflation rate per year is a blessing.

A large part of the world's population suffers from fiat currencies that are much worse than the dollar, with inflation rates ranging from low double digits to high double digits, and even triple digits. This is why stablecoins have gained massive adoption in the third world. The developing world needs to first get off this sinking ship. Once they board a stable ship, they may begin to look for ways to upgrade to Bitcoin yachts.

Unfortunately, although most stablecoins initially started on Bitcoin, they do not operate on Bitcoin today. This technical reality brings significant friction and risk to users. Nowadays, most of the trading volume of stablecoins operates on the Tron blockchain, which is a centralized network run by Justin Sun on a few servers, making him an easy target for foreign governments that do not favor the spread of dollar-pegged stablecoins within their territories.

Currently, the blockchains on which most stablecoins operate are completely transparent. The public addresses of user accounts are publicly traceable, often linked to local exchanges and users' personal data, and easily accessible by local governments. This serves as a leverage that foreign entities can use to counter the spread of dollar-denominated stablecoins.

Bitcoin does not have these infrastructure risks. Unlike Ethereum, Tron, and Solana, Bitcoin is highly decentralized, with tens of thousands of nodes around the world, and has a robust peer-to-peer network for transmitting transactions, which easily bypasses any bottlenecks or obstacles. Its proof-of-work layer provides a separation of powers that other proof-of-stake blockchains do not have. For example, Michael Saylor, despite holding a large amount of Bitcoin, which accounts for 3% of the total supply, does not have direct voting rights in the network's consensus politics. The situation is different for Vitalik and Ethereum's proof-of-stake consensus, or Sun Yuchen and Tron.

In addition, the Lightning Network built on top of Bitcoin unlocks instant transaction settlement, benefiting from the security of Bitcoin's underlying blockchain. It also provides users with significant privacy, as all Lightning Network transactions are designed to be off-chain and do not leave footprints on its public blockchain. This fundamental difference in payment methods allows users to gain privacy when remitting to others. This can reduce the number of potential threats to user privacy from anyone who can view the blockchain to just a few entrepreneurs and tech companies in the worst-case scenario.

Users can also run their own lightning nodes locally and choose how to connect to the network. Many people do this to keep their privacy and security in their own hands. These features are not seen in most blockchains that people use for stablecoins today.

Regulatory policies and even sanctions can still apply to USD stablecoins, which are governed and anchored in Washington, using the same analysis and smart contract-based methods employed today to prevent the criminal use of stablecoins. Fundamentally, a currency like the dollar cannot be decentralized, after all, its design is centralized. However, if most of the stablecoin value is transferred via the Lightning Network, user privacy can also be maintained, protecting users in developing countries from organized crime and even their local governments.

End users care about transaction fees and the cost of transferring funds, which is why Tron has dominated the market to date. However, with the launch of USDT on the Lightning Network, this situation may change quickly. In the world order of Bitcoin and the US dollar, the Bitcoin network will become the medium of exchange for the US dollar, and for the foreseeable future, the US dollar will still be the unit of account.

Can Bitcoin withstand all of this?

Critics of the strategy also worry that the Bitcoin Dollar strategy may have an impact on Bitcoin itself. They wonder whether placing the dollar above Bitcoin would distort its underlying structure. A superpower like the U.S. government might want to manipulate Bitcoin in the most obvious way by forcing it to comply with sanctions regimes, which theoretically they could achieve at the proof-of-work layer.

However, as previously mentioned, the sanctions system can be said to have reached its peak, giving way to an era of tariffs, which attempts to control the flow of goods rather than the flow of capital. This shift in American foreign policy strategy after Trump and the Ukraine war has actually alleviated the pressure on Bitcoin.

As Western companies, such as BlackRock, and even the U.S. government continue to view Bitcoin as a long-term investment strategy, or in the words of President Trump, as a “strategic Bitcoin reserve,” they are also beginning to align themselves with the future success and survival of the Bitcoin network. Attacking Bitcoin's censorship-resistant properties would not only undermine their investment in the asset but also weaken the network's ability to deliver stablecoins to the developing world.

In the world order of Bitcoin and the US dollar, the most obvious compromise that Bitcoin must make is to abandon the dimension of currency as a unit of account. This is bad news for many Bitcoin enthusiasts, and it should be. The unit of account is the ultimate goal of hyper-Bitcoinization, and many of its users are already living in that world, making economic decisions based on the ultimate impact of the number of satoshis they hold. However, for those who understand Bitcoin as the soundest form of money ever, nothing can truly take that away. In fact, the belief in Bitcoin as a store of value and a medium of exchange will be strengthened by this Bitcoin-dollar strategy.

Sadly, after 16 years of trying to make Bitcoin a ubiquitous unit of account like the dollar, some have come to realize that, in the mid-term, the dollar and stablecoins are likely to fulfill that use case. Bitcoin payments will never disappear, and companies led by Bitcoin enthusiasts will continue to rise and should keep accepting Bitcoin as a payment method to build their Bitcoin reserves. However, in the coming decades, the value measured in stablecoins and dollars is likely to dominate crypto trading.

Nothing can stop this train.

As the world continues to adapt to the rise of Eastern power and the emergence of a multipolar world order, the United States may have to make difficult and critical decisions to avoid a prolonged financial crisis. Theoretically, the U.S. can reduce spending, pivot, and restructure to become more efficient and competitive in the 21st century. The Trump administration is certainly attempting to do this, as evidenced by the tariff regime and other related efforts aimed at bringing manufacturing back to the U.S. and cultivating local talent.

Although there are several miracles that might solve America's fiscal dilemma, such as sci-fi labor and intelligent automation, or even a Bitcoin dollar strategy, ultimately, even putting the dollar on the blockchain will not change its fate: it will become a collector's item for history enthusiasts, a relic of an ancient empire suitable for museums.

The centralized design of the US dollar and its dependence on American politics ultimately determines its fate as a currency. However, if we are realistic, its demise may not be seen in 10, 50, or even 100 years. When that moment truly arrives, if history repeats itself, Bitcoin should be there as the operating track, ready to pick up the pieces and fulfill the prophecy of hyperbitcoinization.

Source: Foresight News