Stablecoins are defense technology
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Stablecoins are defense technology
Future currency will become more digital rather than physical.
Navigating Web3 tides with focused insightsAuthor: Morgan Beller
Translation: Block unicorn
This idea has been swirling in my mind since 2018, when I was in Washington discussing Libra (Meta’s, then Facebook’s, stablecoin project) with regulators. One of my personal motivations for supporting Libra was national defense.
The basic premise is that future money will be more digital than physical. Stablecoins—cryptocurrencies pegged to stable currencies like the U.S. dollar—are our best tool for digitizing the dollar. If we don’t digitize the dollar, we risk losing its central role in the financial world. And if that happens, we lose a key pillar of American stability and leadership—one most people now take for granted. If the U.S. government doesn’t wake up to this soon, someone else will. That’s the national defense angle.
If you’re a stablecoin founder but haven’t yet thought of yourself as running a defense technology company, think again. If you’re a regulator who’s been watching stablecoins and their potential role in maintaining dollar dominance, it’s time to wake up.
It’s time to act. The market cap of stablecoins is approaching $150 billion, and adoption continues to grow.
If we want to build robust infrastructure—not just for finance, but even for democracy (bear with me)—we need to move quickly.
With this...
Why Stablecoins Are Defense Technology
Let’s start with a quick history lesson.
Since the end of World War II, the U.S. dollar has been the world’s primary reserve currency. This was decided at the 1944 Bretton Woods Conference, which also led to the creation of the World Bank and the International Monetary Fund.
At the time, Europe’s major financial centers were still rebuilding, while the United States stepped forward to solidify the dollar’s central role in the postwar global economy.
The Bretton Woods system formalized everything by establishing an exchange rate regime where other countries measured the value of their currencies against the dollar, which at the time was tied to gold.
Of course, the dollar is no longer tied to gold. But it still represents American strength, stability, and geopolitical influence. So we continue to operate under the power of that idea.
Being the world’s reserve currency isn’t a right—it’s a privilege. It brings financial advantages, such as not needing to convert currencies during trade or being able to borrow at lower interest rates (which, conversely, makes it easier to impose sanctions on others).
But the real power lies in security. If the dollar collapses, it would have massive ripple effects across the global economy. Much of the world’s monetary system relies on American stability. This means we’re less likely to face targeted attacks, financial warfare, hostile takeovers—or worse.
This is a fact we acknowledge even in our own National Security Strategy. International financial institutions are “force multipliers” for our values and interests.
And it’s also a fact that China wants to change this status quo.
Recently, China released a report titled “American Hegemony and Its Harms,” with an entire section dedicated to dollar dominance. One quote from that section reads: “America’s economic and financial hegemony has become a weapon of geopolitics.”
From our American perspective, the dollar is less a weapon and more a shield. Still, China’s choice of words speaks volumes. Many countries around the world would love to wield the status of global reserve currency as a weapon.
I’ve always been puzzled why U.S. regulators don’t see secure, well-designed stablecoin projects as benign Trojan horses for maintaining dollar supremacy. What better way to distribute your currency across multiple stable assets and secure exchanges than through stablecoins? It’s free marketing for the dollar—a decentralized network allowing millions of people worldwide who want dollars to instantly access them.
If we don’t protect this brand proactively, others will try to use it—or abuse it.
The Good News
Despite our shortcomings, there’s plenty of good news.
Currently, 99% of stablecoins are pegged to the U.S. dollar.
Ironically, our failure to move quickly—or even pursue a top-down approach to digitizing the dollar—might be the best thing that could’ve happened. It gives us the chance to let this ecosystem grow organically.
In the past, American dominance was a push. But digital dominance is more about pull than push. There’s evidence people want stablecoins—and entrepreneurs have already built solutions. That’s actually beautiful.
A diversified stablecoin ecosystem is exactly what we want—not just for consumers, but for national security. The more projects that are pegged to the dollar, the harder it becomes for the dollar to be displaced.
But we do need regulators to do one thing: clarify the rules. And honestly, the cost is minimal. For example… trademarking the dollar.
Trademarking the Dollar
Let’s go back to Washington, D.C. in 2018. I remember asking Treasury officials during a meeting whether “USD” was trademarked. They looked at me like I was crazy: “Why would you ask that?”
If you think about it, there’s no official definition of what a true digital dollar is—at least from the government’s standpoint. That means anyone can essentially create a digital “dollar”—in other words, counterfeit a dollar in 15 minutes. For instance, we could launch NFX-USD today.
On a larger scale, this means China isn’t even obligated to call its RMB-based stablecoin the digital yuan. They could actually use the dollar’s brand and tie it to their own currency. Because no one is watching.
The U.S. government doesn’t need to build its own digital currency (though they’ve considered it). They just need to define the rules of the game.
Trademarking the dollar starts with defining a government-backed U.S. digital dollar. Then, establish a set of requirements that provide regulatory clarity for entrepreneurs—making it easier for the good actors to thrive. At the same time, it protects consumers from bad actors.
Some suggested requirements:
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Fully collateralized reserves
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Auditable financials
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Founder identity verification
This effectively allows the government to outsource the construction, development, and maintenance of the dollar in digital space to capitalism.
If we set clear rules, all of this becomes simple and elegant.
A Call to Founders
There’s only one thing keeping me from sleeping more soundly these days. Every day, I meet more and more stablecoin founders. You’re ambitious, talented, brilliant. You’re driven, sharp, and capable of seeing through complexity.
In the United States, we have a cohort of stablecoin founders who can step in and solve this problem—for us—if we give them the resources and support they need. Crypto enthusiasts love obsessing over individual coin market caps, but folks, this is a team sport.
Technologically and organizationally, stablecoins will enable the dollar’s digital expansion. We have a decentralized team of founders—not to mention the decentralized nature of crypto itself—all working in our favor. If we provide everything these networks need to thrive, this can be an elegant solution powered by the American dream.
I hope every stablecoin founder realizes this—if you don’t already. Your work matters for national defense. It matters for democracy.
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