For years, the headlines have warned of the dollar’s decline.
China is dumping Treasurys. The BRICS nations are plotting a gold-backed currency. Central banks are hoarding bullion. De-dollarization is the goal from Moscow to Brasília.
And if you follow the headlines – or even most analysts on Wall Street – you’d think the era of American financial dominance is coming to an end. Here’s the actual title of a recent research report from JPMorgan:
But here at Brownstone Research, we see things differently.
While the world watches for signs of dollar weakness, we see a much more powerful shift quietly unfolding.
Behind the smoke and noise of geopolitical theater, the most powerful expansion of U.S. monetary power in decades is already underway.
Not through treaties. Not through aircraft carriers going to war. Not through central bank diktats.
It’s being built by developers in Silicon Valley… adopted by traders in Asia and around the globe… and used by ordinary people in places like Nigeria, Turkey, Argentina, and beyond.
I’m talking about U.S. dollar–backed stablecoins.
For those just joining – or just now catching up – this week, we’ve been tracking a major trend taking shape in U.S. monetary policy. It’s aided by a swath of brand-new legislation greenlighting digital assets and cryptocurrencies, as well as by the very Trump Administration cheering the developments on.
In case you missed our latest issues, we cover it all right here – everything from the recent passing of the GENIUS Act, to the upcoming CLARITY Act (already through the House). To the very role of the Fed to dictate interest rate policy in the U.S, and how those very levers of power may be shifting hands soon.
Does the Fed Really Control Interest Rates?
When it comes to stablecoins, a quick refresher…
Stablecoins are a type of cryptocurrency designed to have a stable value, unlike volatile ones like Bitcoin or Ethereum that can swing wildly in price. They’re meant to act more like traditional money (e.g., the U.S. dollar) but on blockchain networks. That makes them useful for things like trading, payments, or storing value without big risks from price changes.
The way they achieve stability is by being “pegged” to stable, real-world assets, like U.S. dollars, U.S. Treasurys, or something else like gold or even other digital assets.
As of today, over 99% of the $250 billion stablecoin market is pegged to the greenback – the U.S. dollar.
And behind each of those digital dollars is likely a short-term U.S. Treasury.
Yes, every new stablecoin minted effectively becomes another loan to the U.S. government.
The value transacted in stablecoins is already staggering. In 2024, stablecoins facilitated $27.6 trillion. That’s more volume than Visa and Mastercard combined transactions in 2024.
Now, we should note that many USDC transactions have to do with crypto investment transactions. But it shows the market is already huge.
And that’s before regulations came into play.
Some governments have tried to halt the rise of stablecoins. After all, they don’t like losing dominance and control of their domestic currencies.
But the Trump Administration has taken a different view. It sees an opportunity – one that could solidify the U.S. dollar’s position at the center of the global economy for decades to come.
With the passage of the GENIUS Act and soon the CLARITY Act, Washington is building the legal framework to support a new financial system. And most importantly… get out of the way.
In other words, the most important upgrade to the global dollar system in 80 years isn’t being directed by central banks. It’s being driven by tech innovation, computer code, and demand – global demand.
In Nigeria, where the naira has collapsed by more than 65% since 2022 and forex restrictions are tightening, stablecoins have become the default safe haven. Some estimates show one in 10 Nigerians holds or transacts in stablecoins, voluntarily bypassing their own central bank.
Even in Turkey, a G20 economy with a modern banking system, the lira has lost over 80% of its value against the dollar. This has pushed over half its citizens toward crypto. According to research from Chainanalysis, nearly 4.3% of Turkey’s gross domestic product (GDP) is transacted in USD stablecoins.
This new system is forming from the bottom up. It’s market-driven. It requires no one’s permission – it’s “permissionless.” It’s global. And by every meaningful metric – value, usage, reserves, and liquidity – it is denominated in U.S. dollars.
We’re witnessing the stealth rise of a borderless digital empire. And it’s spreading not by force but by choice.
This is the ultimate expression of American soft power. The world is using the dollar, and people are voluntarily underwriting its supremacy.
This isn’t the end of dollar hegemony. It’s the upgrade.
And by the time the rest of the world catches on, it’ll be too late to opt out.
To truly grok what’s happening today, we need to look back 80 years.
It was July 1944. Delegates from 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. The world was still at war, but the outcome was clear – and so was the postwar order.
A financial regime change emerged from that meeting. The U.S. dollar would become the anchor of international finance. Other currencies would peg themselves to the dollar, and the dollar itself would be convertible to gold at $35 per ounce.
That was the beginning of the American century. The U.S. had the gold, the guns, and the industrial capacity to support the system. So the world aligned behind the dollar.
But here’s the part most people forget…
Even after Nixon ended dollar convertibility in 1971, the system didn’t collapse. It actually got stronger. Foreign nations continued using dollars. Central banks still bought Treasurys. Global trade continued to settle in greenbacks.
Why? Because the world didn’t trust the dollar for its peg to gold. They trusted the dollar for its liquidity, its legal framework, and (most of all) its centrality.
By the time gold was removed from the equation, the dollar had already become indispensable.
The network effects of Bretton Woods didn’t die. The nature of where trust lay within the system just evolved.
But after decades of fiscal imprudence and ballooning debt, inflation, global de-dollarization efforts from other nations, and many other factors, the very bedrock of trust in the U.S. dollar has come into question.
And now, it’s evolving again.
Only this time, there has been no summit or signed treaty required.
Just code and ballooning demand in the form of stablecoins.
Here’s a chart of the increase in stablecoin transaction volume since 2018. We can see that demand took off in 2024.
Stablecoins are the new pegs. But instead of being backed by gold, they’re backed by U.S. Treasurys. And instead of being managed by central banks, they’re operated by the market – on decentralized infrastructure, provided by the blockchain.
This system has no capital controls. It doesn’t shut down on the weekend. And there’s no need for a trusted third party in the middle of every transaction.
It’s akin to Bretton Woods… without the bureaucracy and hidden agendas.
And the architecture is even more powerful for America because…
It’s what we might call Bretton Woods… by stealth.
And this new version may be even stronger than the original.
Back then, the U.S. had to enforce dollar dominance through political pressure, military strength, and financial incentives.
As we saw above, people around the world are opting in – voluntarily. They’re choosing the dollar by adopting stablecoins.
And here’s the kicker… The U.S. didn’t even have to build the system. The private sector did it for us.
And now, with the passage of the GENIUS Act and soon the CLARITY Act, Washington is preparing to plug this infrastructure directly into the U.S. Treasury market.
The dollar standard – originally drawn up in 1944 – has quietly been rebuilt on the blockchain.
And even though China and the EU have launched their own central bank digital currencies (CBDCs), they’ve thankfully gained little ground. These tightly controlled government tokens haven’t displaced a single dollar in global trade or reserves.
Not the case for the digital dollar.
The digital dollar is here – and not in the centralized way we would have feared. Meanwhile, the American empire is expanding, not contracting – contrary to what you’ll read all over the mainstream financial news.
And here’s one thing that might surprise some…
Most of us reading this live in countries where the currency works. Our dollars (or euros or yen) hold their value, so we can save and invest with ease and without issue.
But that’s not the case for billions of people around the world. And that’s exactly where stablecoins are gaining traction.
Let me take a step back…
When empires expand, they usually leave a trail – treaties, military bases, and trade agreements.
But the most powerful form of expansion doesn’t come through conquest. It comes through behavior – small decisions, repeated every day – of people quietly shifting their allegiance. Not out of ideology, but necessity.
That’s exactly what we’re seeing right now in dozens of fragile economies – from Lagos to Buenos Aires, Istanbul to Karachi.
Citizens are abandoning their national currencies, but they’re not doing it by moving gold bars or fleeing to Swiss banks. It’s as simple as downloading an app… and holding stablecoins. 99% of which are dollar-backed ones.
This is digital dollarization. And it’s unfolding at a speed and scale no central bank – not even the Federal Reserve – fully anticipated.
Let me give you a real-world example.
Argentina saw inflation reach 292% last year. Although that rate has lowered to 40% annual inflation in June, the peso is nearly unusable for savings or large transactions.
That’s pushed over 5 million Argentines (out of 46 million) towards crypto. And over 60% of crypto transactions in Argentina involved USD stablecoins. In fact, over 75% of real estate transactions in Argentina are now priced in dollars. Hundreds of businesses in Argentina accept Tether (USDT) as a payment method… and even pay employee salaries with it.
Latin America has among the fastest growth rates of stablecoin transactions in the world. Brazil has seen high inflation rates, as well. And Brazilians transact nearly as much value in stablecoins: $90 billion compared to the $91 billion in Argentina.
Mexico and Venezuela aren’t far behind. One big reason for adoption in those countries among all other Latin American countries is to avoid remittance fees.
Many people come to America to find better-paying jobs than they can get in their home countries. They send money home to support their families – this is called a remittance. And a World Bank report shows remittance fees average 6.6% of the amount sent.
In comparison, stablecoin transfer fees are under 0.1%.
When a local currency fails, people don’t wait for policy reforms. They opt out and reach for a better system.
Anyone with a smartphone and an internet connection can exit their national currency regime and enter the dollar system.
And once they’ve made the switch, they never need to go back. This is a structural shift in global monetary allegiance – and it’s flying under the radar of most policymakers.
And again, as I mentioned above, we didn’t need to spend billions of taxpayers’ dollars and waste years running feasibility studies and having bureaucrats slow down the production of the system. We let private industry build it and enabled world citizens to effortlessly use the dollar.
That’s what makes it so durable.
Because these aren’t political decisions. They’re deeply personal ones, with millions of people around the world making a quiet, rational choice. They’re voting for convertibility, stability, and trust.
And they’re voting for the dollar.
This new wave of dollarization has two consequences that most people haven’t fully grasped.
First, it quietly dismantles the power of local monetary policy in fragile economies.
When enough economic activity migrates to digital dollars, the central bank loses its grip. It can’t stimulate spending. It can’t fight inflation. It becomes little more than a figurehead issuing policy to a population that has already opted out.
Second, it extends the reach of U.S. financial oversight. Even when Washington doesn’t explicitly pursue that.
Every digital dollar in circulation operates under U.S. law. Whether it’s issued by a regulated stablecoin provider or held by a compliant custodian, it’s subject to the rules of the American legal system.
That means every transaction can be audited. Every wallet can be sanctioned. Every dollar – no matter where in the world it’s held – can be taxed, traced, or frozen – if necessary.
Digital dollarization exports American jurisdiction. And like we’ve said, this is not done by force or treaty.
This is transforming the dollar from a reserve currency into a global economic platform – a platform that absorbs other economic systems and grows stronger with every user who opts in.
And as my friend and colleague Senior Analyst Joe Withrow pointed out in Tuesday’s Bleeding Edge, with the passage of the GENIUS Act and upcoming CLARITY Act, we’re seeing an important shift in oversight.
Regulatory authority over this emerging stablecoin infrastructure is moving from the Federal Reserve – a theoretically independent body – to the Treasury Department, which answers directly to the executive branch.
That means faster responses during economic emergencies…
But it also means the power to wield these tools will change hands with every administration.
Whether that’s a feature or a flaw depends on who’s in charge. Time will tell…
Either way, the infrastructure is being locked in, and the dollar’s reach is extending. And the rails it runs on are being built largely by the private sector.
We can’t overstate how profound this megatrend is. That is exactly why Brownstone founder Jeff Brown, along with our team, has spent tremendous resources to bring you his latest presentation on “Project MAFA.” We want our subscribers to be ready for it. If you haven’t watched his presentation yet, please be aware that the special offer is closing tonight. You can watch the final replay right here.
Stablecoins are changing the plumbing of the global financial system. Soon, dollars won’t just move through legacy banks and clearinghouses. They’ll flow through blockchain networks.
And as my friend and colleague Senior Crypto Analyst Ben Lilly showed us yesterday, over 85% of those stablecoin transactions are happening on Ethereum and its layer-2 ecosystem.
Every one of those transactions consumes a little bit of ETH to process. As stablecoin volume increases, so does demand for the underlying infrastructure.
This is a migration of capital from closed, permissioned systems to open, permissionless, and programmable rails.
The early adopters of this system won’t be American hedge funds or Fortune 500 companies. They’ll be everyday citizens in unstable economies and people searching for safety, yield, and a future they can plan for.
For the first time, they’ll be able to hold dollars without needing a U.S. bank account… and earn yield on those dollars, as stablecoin issuers funnel their reserves into short-term U.S. Treasurys.
In effect, this system is helping to finance the U.S. government… on autopilot.
Tether, Circle, and other major issuers are now among the largest non-sovereign holders of American debt. Every new stablecoin they issue is a digital loan to Washington – backed not by foreign governments but by individual users across the globe.
And that’s just the beginning. This new technology will ensure that the dollar remains the most widely used currency in the world. And that will provide America with a strong dollar to help its economy continue thriving.
The best days are still ahead.
– Nick Rokke, Senior Analyst, The Near Future Report, Brownstone Research
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
