As the global landscape transitions from a unipolar order dominated by the United States to a multipolar structure led by BRICS nations, the U.S. dollar is under considerable stress due to declining bond demand and increasing debt costs. The Genius Act, enacted in July 2025, represents a significant U.S. initiative to address these challenges by legalizing Treasury-backed stablecoins, thereby unlocking billions in foreign demand for U.S. bonds.

The blockchain infrastructure supporting these stablecoins is poised to shape the global economy for decades. Bitcoin, distinguished by its unparalleled decentralization, the privacy offered by the Lightning Network, and robust security features, is positioned as the optimal choice for facilitating the forthcoming digital dollar revolution. This transformation promises low switching costs when fiat currencies inevitably lose relevance. This essay examines the necessity for the digitization of the dollar through blockchain technology and argues for Bitcoin’s role as the foundational platform essential for stabilizing the U.S. economy amid its evolving global position. 

End of the Unipolar World

The shift from a unipolar world order, in which the United States was the singular superpower capable of dictating market dynamics and geopolitical outcomes, to a multipolar world is increasingly evident. Within this emerging structure, a coalition of Eastern-aligned nations, known as BRICS—comprising Brazil, Russia, China, and India—poses a challenge to U.S. dominance and the established dollar-centric financial system.

Various indicators suggest this geopolitical transformation. For instance, the United States’ military alliance with Saudi Arabia is fundamentally changing; the U.S. no longer enforces the petrodollar agreement that required Saudi oil transactions to be conducted exclusively in dollars in return for military protection. The significance of the petrodollar strategy has waned considerably, especially since the onset of the Ukraine conflict, when Saudi Arabia began accepting currencies other than dollars for oil trades.

The Weakening of the U.S. Bond Market

Another critical sign of geopolitical change is the deterioration of the U.S. bond market. Growing skepticism regarding the long-term creditworthiness of the U.S. government is prevalent. Concerns stem from internal political instability and doubts regarding the government’s capacity to adapt to the rapidly evolving, high-tech global landscape marked by the emergence of BRICS nations.

Elon Musk, recognized as one of the world’s wealthiest individuals and an exceptionally successful CEO, has publicly voiced these concerns. He recently disclosed in an appearance at an All-In Summit that the government is essentially “unfixable,” expressing frustration over the national debt and the efficacy of governmental initiatives.

ELON MUSK: “I haven’t been to DC since May. The government is basically unfixable. I applaud David (Sacks’) noble efforts… but at the end of the day if you look at our national debt… if AI and robots don’t solve our national debt, we’re toast.” pic.twitter.com/XKSes4fBfq

— Autism Capital (@AutismCapital) September 10, 2025

If Elon Musk, with his extensive resources and influence, is unable to effectuate significant changes within the U.S. government, it raises questions about who could achieve this feat.

This sentiment is echoed in the diminishing demand for long-term U.S. bonds, necessitating higher interest rates to attract investors. Currently, the US30Y bond yield stands at 4.75%, a 17-year high. Demand in long-dated U.S. bond auctions has also seen a downward trend, with disappointing levels reported in 2025.

The declining interest in long-dated U.S. bonds carries serious implications for the U.S. economy. The Treasury must offer higher interest rates to draw in investors, thereby escalating the government’s obligations related to the national debt. Currently, U.S. interest payments approach one trillion dollars annually, surpassing the entire military budget.

If the U.S. cannot attract sufficient buyers for its forthcoming debt, it may face challenges in meeting its immediate financial obligations, potentially resorting to the Federal Reserve to purchase that debt, a move that would expand its balance sheet and money supply. While the consequences are complex, they are likely to result in inflationary pressures on the dollar, negatively impacting the U.S. economy.

How Sanctions Wounded the Bond Market

Further destabilizing the U.S. bond market, in 2022, the United States weaponized its bond market against Russia in response to the Ukraine invasion. As hostilities commenced, the U.S. froze Russian treasury reserves held abroad, which were intended to service its national debt to Western investors. This action aimed to drive Russia into default, effectively blocking all attempts by Russia to service its debt.

A U.S. Treasury spokesperson confirmed at that time that certain payments would not be permitted. “Today is the deadline for Russia to make another debt payment,” she stated.

“Beginning today, the U.S. Treasury will not permit any dollar debt payments to be made from Russian government accounts at U.S. financial institutions. Russia must choose between depleting its remaining dollar reserves or default.”

This unprecedented use of sanctions served to showcase the U.S.’s leverage over the bond market. However, sanctions can carry unintended consequences; they have weakened foreign demand for U.S. bonds as countries not aligned with U.S. foreign policy seek to mitigate their risks. Notably, China has been a leading nation in this trend, experiencing a decline in its bond holdings from a peak of over 1.25 trillion dollars in 2013 to approximately 750 billion today, exacerbated by the Ukraine conflict.

The substantial decrease in foreign demand for U.S. bonds has severely undermined confidence in the bond market. Not only did the sanctions prevent Russia from servicing its debts, but they also negatively affected the investors involved. The freezing of foreign treasury reserves highlighted a critical message: any sovereign nation contravening U.S. foreign policy risks severe financial repercussions, including bond market access.

In light of the perceived overreach of sanctions during the previous administration, the Trump administration has pivoted away from sanctions as a primary strategy, favoring a tariff-based approach that has shown mixed results. While the Trump administration touts record revenues and infrastructure investments spurred by the private sector, Eastern nations have intensified their collaboration within the BRICS alliance.

The recent SCO summit in Tianjin, China, witnessed leaders from major nations, including Chinese President Xi Jinping, Russian President Vladimir Putin, and Indian Prime Minister Narendra Modi, among others, pledge to act as “partners not rivals,” marking a significant step towards a multipolar world order.

The Stablecoin Playbook

In parallel with China’s divestment from U.S. bonds, a new contender has emerged. Tether, a financial technology firm established in the early Bitcoin era, now holds $171 billion in U.S. bonds, approaching a quarter of China’s holdings and surpassing those of many other nations.

Tether, the purveyor of the leading stablecoin, USDT, maintains a market capitalization of this value. The company reported earnings of $1 billion in the first quarter of 2025, operating with a straightforward yet innovative business model: acquiring short-dated U.S. bonds and issuing USDT tokens backed on a 1-for-1 basis, capturing the coupon interest payments from the U.S. government. Employing a workforce of around 100, Tether is recognized as one of the most profitable companies globally in terms of profit per employee.

Tether pic.twitter.com/yZnimVxSwR

— Paolo Ardoino (@paoloardoino) July 18, 2025

Circle, the issuer of USDC, the second-largest stablecoin, also holds approximately $50 billion in short-dated treasuries. Stablecoins have seen widespread application globally, particularly in Latin America and other developing nations, as alternatives to local fiat currencies beset by severe inflationary pressures and capital controls.

The transaction volume facilitated by stablecoins has grown exponentially, now exceeding initial expectations; a 2025 Chainalysis report indicated that from June 2024 to June 2025, USDT processed over $1 trillion monthly, peaking at $1.14 trillion in January 2025. USDC saw monthly volumes range from $1.24 trillion to $3.29 trillion, underscoring the integral role of Tether and USDC in crypto infrastructure, particularly concerning cross-border payments and institutional engagement.

In Latin America, 9.1% of total crypto value received from 2023 to 2024 was attributed to stablecoins, with year-over-year growth rates ranging from 40% to 100%. This statistic emphasizes the demand for alternative currencies in regions experiencing economic instability, as flagged in a 2024 Chainalysis report.

The United States requires new avenues for demand for its bonds, which can be found in the global appetite for the dollar. Many countries remain tied to inferior fiat currencies, and as the world shifts to a geopolitical framework that allows the dollar to compete on equal footing with other fiat currencies, it is likely to maintain its superiority. Despite its shortcomings, the U.S. is still a superpower with considerable wealth, human capital, and economic potential, particularly when compared to smaller nations with less stable currencies.

Latin America has demonstrated a strong desire for the dollar; however, accessibility is often restricted as local governments resist traditional banking systems tied to the dollar. In many regions outside the U.S., obtaining dollar-denominated accounts is challenging, as local banks are closely regulated, often acting in accordance with government interests that seek to protect their domestic currencies.

Russia warns US exploits world CRYPTO users to pay its eyewatering $35T debt

‘Push everyone into crypto cloud then devalue it’? pic.twitter.com/nohYULyYOf

— RT (@RT_com) September 8, 2025

Stablecoins present a solution to both the demand for U.S. bonds and the challenges posed by local currency restrictions, enabling the provision of dollar-denominated value to individuals regardless of geographical constraints.

Leveraging the censorship-resistant characteristics of their underlying blockchains, stablecoins offer users plausible deniability and enhanced privacy, which traditional banks cannot guarantee. Through the promotion of stablecoins, the U.S. can tap into previously unreachable foreign markets, expanding both demand and usage while simultaneously exporting dollar inflation to nations with limited influence over U.S. politics—a longstanding trend in USD history. Strategically, this presents a highly beneficial scenario for the United States, leveraging established financial technologies.

The U.S. government is cognizant of this potential. As noted by Chainalysis, “The stablecoin regulatory landscape has evolved significantly over the past 12 months. While the GENIUS Act in the U.S. (which legalized U.S. bond-backed stablecoins) has yet to take effect, its passage has sparked considerable institutional interest.”

Why Stablecoins Should Ride On Top of Bitcoin

To maximize the benefits of Bitcoin for the developing world while transitioning away from subpar fiat currencies, it is advisable for the dollar to employ Bitcoin as its underlying infrastructure. Every dollar stablecoin wallet should ideally also function as a Bitcoin wallet.

Critics of this Bitcoin-dollar strategy may argue that it contradicts Bitcoin’s foundational libertarian principles, which positioned it to supplant the dollar rather than reinforce it within modern financial systems. However, this perspective tends to be more U.S.-centric. It is relatively straightforward to critique the dollar’s performance when one benefits from it directly; when the local currency faces severe inflation in other nations, those critiques often fall short. For countless individuals globally, a 2-8% annual inflation rate might represent a much-desired stability.

Significantly, many regions experience far worse inflation rates, and the population is increasingly adopting stablecoins in response. The initial goal for these individuals is to secure a more stable form of value. The anticipation is that once they experience stability, they may subsequently seek to transition to Bitcoin as a superior financial solution.

Regrettably, most stablecoins are not currently based on Bitcoin, despite their origins on the platform. This presents considerable friction and risk for users. Presently, the majority of stablecoin operations occur on the Tron blockchain, a centralized network that can be easily targeted by governments opposed to the propagation of U.S. dollar stablecoins.

Many blockchains utilized for stablecoin transactions are also characterized by their transparency. Public addresses that function as user account identifiers are easily traceable and often linked to personal user data, making them vulnerable to scrutiny by local governments. Such conditions create significant leverage for these governments to oppose the proliferation of dollar-denominated stablecoins within their jurisdictions.

Bitcoin is devoid of these infrastructural vulnerabilities. Unlike Ethereum, Tron, or Solana, Bitcoin maintains a highly decentralized configuration, with thousands of redundant copies around the globe. Its robust peer-to-peer network effectively circumvents potential bottlenecks. Moreover, Bitcoin’s proof-of-work consensus mechanism provides a distinct separation of powers absent in proof-of-stake systems. For instance, Michael Saylor, despite his large Bitcoin holding, does not possess a significant voting influence in the network’s consensus politics—a feature not applicable to the governance structures of Ethereum or Tron.

Furthermore, the Lightning Network built on Bitcoin facilitates instantaneous transaction settlement, benefiting from the inherent security of the Bitcoin blockchain. This not only enhances user privacy—since all Lightning transactions are off-chain and leave no permanent trace on the public blockchain—but also mitigates tracking risks. This results in privacy for users sending funds, shielding them from surveillance by third parties who lack Lightning wallet access.

Individuals can establish their own Lightning nodes locally and choose unique connections to the network, a practice already adopted by many. These features are largely absent in the ecosystems of current stablecoin providers.

It remains feasible for compliance measures and sanctions to be applied to dollar stablecoins, given governance ties to Washington and existing analytics infrastructure for monitoring their use. There is no inherently decentralized mechanism for governing centralized currencies, but routing most stablecoin transactions through the Lightning Network could preserve user privacy and safeguard individuals, particularly in developing regions, from organized crime and local governmental pressures.

Ultimately, transaction fees represent a primary concern for users—the cost associated with transferring their funds—which is why Tron has previously dominated the stablecoin landscape. However, as USDT gains traction on the Lightning Network, this dynamic may alter. In a prospective Bitcoin-dollar world order, the Bitcoin network could serve as the primary medium for dollar transactions, while the dollar itself retains its position as the measurement unit for value.

Can Bitcoin Survive This?

Critics of this strategy express concern over the potential implications for Bitcoin. They fear that aligning the dollar’s strong incentives with Bitcoin may distort its foundational principles. A significant concern is that a powerful nation like the U.S. may exploit Bitcoin to conform to its sanctions regimes, potentially impacting the proof-of-work layer.

However, it can be argued that the influence of sanctions has peaked, paving the way for a strategic shift towards tariffs, which tend to regulate goods rather than funds. This post-Trump, post-Ukraine recovery within U.S. foreign policy actually alleviates some of the pressures on Bitcoin.

The Birth Of The Bitcoin-Dollar

As major corporations and even the U.S. government increasingly adopt Bitcoin as a long-term asset or a “Strategic Bitcoin Reserve,” they consequently create alignment with the network’s continued success. Undermining Bitcoin’s censorship-resistant features could jeopardize their investments and diminish its ability to supply stablecoins to the developing world.

Ultimately, the principal concession Bitcoin might have to make in this Bitcoin-dollar paradigm involves relinquishing its status as the dominant unit of account. This development is understandably troubling for many Bitcoin proponents. The notion of unit of account represents the pinnacle of hyperbitcoinization, and for numerous users, economic decisions hinge on the preservation of their Bitcoin holdings. Nevertheless, the essence of Bitcoin as a durable store of value and medium of exchange will remain bolstered by this new relationship.

Sadly, after a prolonged period of striving for Bitcoin to achieve the same status as the dollar, it is increasingly probable that the dollar and its stablecoins will fulfill that role in the medium term. While Bitcoin transactions will persist, and companies founded by Bitcoin proponents will continue to adopt it as a transactional currency to strengthen their reserves, it is likely that stablecoins and dollar-denominated values will dominate crypto commerce in the coming decades.

Nothing Stops This Train

As global dynamics evolve in response to the ascending powers of the East, it is imperative for the United States to navigate through complex and pivotal decisions to avert an enduring financial crisis. Theoretically, the U.S. could restructure its expenditures, adapting to become more efficient and competitive in the 21st century. The Trump administration appears to be pursuing this aim, with initiatives like the tariff regime and efforts to reestablish domestic manufacturing capabilities.

Nonetheless, as astutely observed by Lyn Alden, “nothing stops this train.”

While it remains feasible to envision extraordinary solutions to the U.S.’s financial challenges—such as groundbreaking automation and the integration of the Bitcoin-dollar strategy—the essential nature of the dollar will endure: it may eventually become a relic, preserved in a museum akin to tokens from bygone empires.

The centralized design and inherent reliance on U.S. politics threaten the dollar’s longevity as a functional currency. However, it is pragmatic to acknowledge that its decline may not be imminent; it could take a decade, half a century, or even longer. When the eventual time arrives, Bitcoin is anticipated to serve as the foundational infrastructure ready to facilitate this transition, ultimately fulfilling the prophecy of hyperbitcoinization.

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