With stablecoins surging in popularity, can Bitcoin still fulfill the "payment dream" of money?
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With stablecoins surging in popularity, can Bitcoin still fulfill the "payment dream" of money?
The Genius Act paves the way for Bitcoin to dominate global infrastructure.
Navigating Web3 tides with focused insightsWritten by: Juan Galt
Translated by: AididiaoJP, Foresight News
As the GENIUS Act solidifies the status of Treasury-backed stablecoins, Bitcoin’s decentralized network makes it the superior blockchain for global adoption and for countering declining demand for U.S. bonds in a multipolar world.
As the world shifts from a U.S.-dominated unipolar order to a multipolar system led by the BRICS nations, the dollar faces unprecedented pressure due to falling bond demand and rising debt costs. The GENIUS Act, passed in July 2025, marks a bold U.S. strategy to address this by legally recognizing Treasury-backed stablecoins, thereby unlocking massive overseas demand for U.S. bonds.
The blockchain hosting these stablecoins will shape the global economy for decades. Bitcoin, with its unparalleled decentralization, Lightning Network privacy, and robust security, emerges as the optimal platform to drive this digital dollar revolution—ensuring low transition costs when fiat currencies inevitably decline. This article explores why the dollar must—and will—become digital via blockchain, and why Bitcoin must serve as its underlying rail for the U.S. economy to achieve a soft landing from its position as a global empire.
The End of the Unipolar World
The world is transitioning from a unipolar world order—in which the U.S. was the sole superpower capable of influencing markets and dominating global conflicts—to a multipolar order where Eastern alliances can organize independently of U.S. foreign policy. This Eastern alliance, known as BRICS, consists of major countries such as Brazil, Russia, China, and India. The inevitable rise of BRICS leads to geopolitical realignment, challenging the dollar's hegemony.
Several seemingly isolated data points indicate this reordering, such as the military alliance between the U.S. and Saudi Arabia. The U.S. no longer upholds the petrodollar agreement, under which Saudi oil was sold exclusively in dollars in exchange for U.S. military protection in the region. The petrodollar mechanism was a primary source of dollar demand and has long been considered central to U.S. economic power since the 1970s, but it has effectively ended in recent years—Saudi Arabia has begun accepting currencies other than the dollar for oil-related trade, at least since the start of the Ukraine war.
Weakness in the U.S. Bond Market
Another critical data point in this geopolitical shift is weakness in the U.S. bond market, reflecting growing skepticism about the long-term creditworthiness of the U.S. government. Some worry about domestic political instability, while others question whether the current governmental structure can adapt to a rapidly evolving technological landscape and the rise of BRICS.
Elon Musk is reportedly among the skeptics. He recently spent months working with the Trump administration through the Department of Government Efficiency to restructure the federal government and the nation’s finances, only to abruptly exit politics in May.
Musk shocked the internet during a recent summit appearance, stating: "I haven't been to Washington since May. The government is basically hopeless. I admire David Sacks' noble efforts... But ultimately, if you look at our national debt... if AI and robotics don’t solve our national debt problem, we’re doomed."
If even Musk cannot rescue the U.S. government from financial doom, who can?
Such doubts are reflected in weak demand for long-term U.S. bonds, manifesting as higher interest rates required to attract investors. Today, the yield on U.S. 30-year Treasury bonds stands at 4.75%, a 17-year high. According to Reuters, demand for long-term bonds like the 30-year Treasury has shown a downward trend, described as “disappointing” in 2025.
Declining demand for long-term U.S. bonds significantly impacts the U.S. economy. The U.S. Treasury must offer higher yields to attract investors, increasing the interest payments on national debt. Today, U.S. interest payments approach $1 trillion annually—exceeding the entire military budget.
If the U.S. fails to find sufficient buyers for its future debt, it may struggle to meet immediate obligations and be forced to rely on the Federal Reserve to purchase that debt—expanding its balance sheet and money supply. While complex in impact, this could likely lead to dollar inflation, further damaging the U.S. economy.
How Sanctions Devastated the Bond Market
The U.S. bond market has been further weakened by America’s manipulation of its controlled bond markets against Russia in 2022, in response to its invasion of Ukraine. When Russia invaded, the U.S. froze Russia’s overseas treasury reserves—reserves intended to repay its sovereign debt to Western investors. Reports indicate the U.S. also began blocking all Russian attempts to repay debts to foreign bondholders, forcing default.
A female spokesperson for the U.S. Treasury confirmed at the time that certain payments would no longer be allowed.
"Today is Russia's deadline for another debt payment," she said.
"Starting today, the U.S. Treasury will not allow any dollar-denominated debt payments from Russian government accounts held at U.S. financial institutions. Russia must now choose between depleting its remaining dollar reserves or new revenue streams, or defaulting."
The U.S., by leveraging its sanctions-based foreign policy tools, effectively weaponized the bond market against Russia. But sanctions are a double-edged sword: since then, foreign demand for U.S. bonds has weakened, as countries misaligned with U.S. foreign policy seek risk diversification. China has led this shift away from U.S. bonds, peaking at over $1.25 trillion in holdings in 2013 and accelerating its decline since the start of the Ukraine war, now nearing $750 billion.
While this event demonstrated the devastating power of sanctions, it also deeply damaged confidence in the bond market. Not only did the Biden administration block Russia from repaying its debts, harming investors as collateral damage, but freezing its foreign treasury reserves sent a message to the world: if you, as a sovereign state, defy U.S. foreign policy, all bets are off—including in the bond market.
The Trump administration has moved away from sanctions as a primary strategy, recognizing their harm to the U.S. financial sector, and shifted toward a tariff-based foreign policy. These tariffs have had mixed results so far. While the Trump administration boasts record tax revenues and private-sector infrastructure investment domestically, Eastern nations have accelerated cooperation through the BRICS alliance.
The Stablecoin Playbook
While China has reduced its U.S. bond holdings over the past decade, a new buyer has emerged rapidly into the upper echelons of power. Tether, a fintech company born in Bitcoin’s early days, now holds $171 billion in U.S. Treasuries—nearly a quarter of China’s holdings and more than most individual countries.
Tether is the issuer of the most popular stablecoin, USDT, with a circulating market cap of $171 billion. The company reported $1 billion in profit for Q1 2025, operating a simple yet powerful business model: purchasing short-term U.S. bonds, backing USDT issuance 1:1, and pocketing the coupon interest from U.S. government debt. Starting the year with just 100 employees, Tether is reportedly one of the most profitable companies per employee in the world.
Circle, the issuer of USDC—the second most popular stablecoin—also holds nearly $50 billion in short-term Treasury bills. Stablecoins are used globally, especially in Latin America and developing countries, as alternatives to local fiat currencies suffering from far worse inflation than the dollar and often hindered by capital controls.
Stablecoin transaction volumes are no longer niche or geeky financial toys—they now reach trillions of dollars. A 2025 Chainalysis report states: "From June 2024 to June 2025, USDT processed over $1 trillion monthly, peaking at $1.14 trillion in January 2025. Meanwhile, USDC’s monthly volume ranged between $1.24 trillion and $3.29 trillion. These volumes highlight Tether and USDC’s enduring centrality in crypto market infrastructure, particularly in cross-border payments and institutional activity."
For example, according to a 2024 Chainalysis report focused on Latin America, Latin America accounted for 9.1% of total received crypto value between 2023 and 2024, with annual usage growth between 40% and 100%, over 50% of which involved stablecoins—demonstrating strong demand for alternative currencies in the developing world.
The U.S. needs new demand for its bonds, and that demand comes in the form of dollar demand, as most of the world remains trapped in inferior fiat currencies compared to the dollar. If the world shifts toward a geopolitical structure forcing the dollar to compete equally with all other fiats, the dollar may still remain the best among them. Despite its flaws, the U.S. remains a superpower with immense wealth, human capital, and economic potential—especially compared to many smaller nations and their questionable pesos.
Latin America has shown deep desire for the dollar, but there’s a supply problem, as local nations resist traditional banking channels for dollar access. In many countries outside the U.S., obtaining dollar-denominated accounts is difficult. Local banks are heavily regulated and answer to their governments, which have incentives to protect their own peso. After all, the U.S. isn’t the only government that knows how to print money and defend its currency’s value.
Stablecoins solve both problems: they generate demand for U.S. bonds and enable dollar-denominated value transfer to anyone, anywhere.
Stablecoins leverage the censorship-resistant nature of their underlying blockchains—something local banks cannot provide. By promoting stablecoins, the U.S. can reach untapped foreign markets, expand its user base and demand, while exporting dollar inflation to countries with no direct political influence over the U.S.—a long-standing tradition in dollar history. Strategically, this sounds ideal for the U.S., simply extending how the dollar has operated for decades, now built atop new financial technology.
The U.S. government recognizes 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 driven strong institutional interest."
Why Stablecoins Should Run on Bitcoin
The best way to ensure Bitcoin lifts the developing world out of inferior fiat currencies is to ensure the dollar runs on Bitcoin. Every dollar stablecoin wallet should also be a Bitcoin wallet.
Critics of the Bitcoin-dollar strategy argue this contradicts Bitcoin’s libertarian roots—Bitcoin was meant to replace the dollar, not enhance it or bring it into the 21st century. Yet this concern is largely U.S.-centric. It’s easy to condemn the dollar when you’re paid in dollars and your bank account is denominated in them. It’s easy to criticize when 2-8% dollar inflation is your reality. For too many countries outside the U.S., 2-8% annual inflation would be a blessing.
A large portion of the world suffers under far worse fiat currencies, with inflation ranging from low double digits to triple digits—this is why stablecoins have already achieved mass adoption in the developing world. The developing world needs to escape the sinking ship first. Once aboard a stable vessel, they may begin seeking a path to upgrade to the Bitcoin yacht.
Unfortunately, despite most stablecoins initially being launched on Bitcoin, they no longer operate on it—a technical reality that introduces significant friction and risk for users. Today, most stablecoin volume runs on the Tron blockchain, a centralized network operated by Justin Sun across a few servers, making him vulnerable to foreign governments hostile to dollar-stablecoin proliferation within their borders.
Most blockchains hosting stablecoins today are also fully transparent. Public addresses serving as user accounts are publicly traceable, often linked by local exchanges to personal user data, and easily accessible to local governments. This gives foreign authorities a lever to counteract the spread of dollar-denominated stablecoins.
Bitcoin has none of these infrastructure risks. Unlike Ethereum, Tron, or Solana, Bitcoin is highly decentralized, with tens of thousands of nodes worldwide, and features a sound peer-to-peer network for transaction transmission that easily bypasses bottlenecks. Its proof-of-work layer ensures separation of power absent in proof-of-stake blockchains. For example, Michael Saylor, despite holding around 3% of Bitcoin’s total supply, has no direct voting power in network consensus. The same cannot be said for Vitalik and Ethereum’s proof-of-stake consensus, or Justin Sun and Tron.
Additionally, the Lightning Network built on Bitcoin enables instant transaction settlement, benefiting from Bitcoin’s base-layer security. It also offers significant user privacy, as all Lightning transactions are off-chain by design and leave no footprint on the public blockchain. This fundamental difference in payment methods grants users privacy when sending funds—reducing the number of threat actors who can invade privacy from anyone viewing the blockchain to only a few entrepreneurs and tech companies, at worst.
Users can also run their own Lightning nodes locally and choose how to connect to the network—many do, taking privacy and security into their own hands. These features are absent in most blockchains currently used for stablecoins.
Compliance policies and even sanctions can still apply to dollar stablecoins, governed from Washington, using the same analytical and smart contract-based methods employed today to prevent stablecoin misuse. Fundamentally, the dollar cannot be decentralized—it is designed to be centralized. However, if most stablecoin value transfers shift to the Lightning Network, user privacy can be preserved, protecting users in developing nations from organized crime and even their own governments.
End users care about transaction fees—the cost of transferring funds—which is why Tron currently dominates the market. But this could soon change as USDT launches on the Lightning Network. In a Bitcoin-dollar world order, the Bitcoin network becomes the dollar’s medium of exchange, while the dollar remains the unit of account for the foreseeable future.
Can Bitcoin Handle This?
Critics of the Bitcoin-dollar strategy also worry about its potential impact on Bitcoin itself. They question whether placing the dollar atop Bitcoin might distort its underlying structure. The most obvious way a superpower like the U.S. government could attempt to manipulate Bitcoin would be to force it into compliance with sanctions regimes—something theoretically possible at the proof-of-work layer.
However, as previously noted, the era of sanctions may have peaked, giving way to an age of tariffs aimed at controlling the flow of goods rather than capital. This post-Trump, post-Ukraine-war shift in U.S. foreign policy actually reduces pressure on Bitcoin.
As Western firms like BlackRock, and even the U.S. government, continue adopting Bitcoin as a long-term investment strategy—or in President Trump’s words, as a “strategic Bitcoin reserve”—they become increasingly aligned with the success and survival of the Bitcoin network. Attacking Bitcoin’s censorship resistance would not only undermine their investment in the asset but also weaken the network’s ability to deliver stablecoins to the developing world.
In a Bitcoin-dollar world order, the most apparent compromise Bitcoin must make is relinquishing the unit-of-account function. This is bad news for many Bitcoin enthusiasts—and rightly so. The unit of account is the ultimate goal of hyperbitcoinization, and many users already live in that world today, calculating economic decisions based on the final impact on their satoshi holdings. Yet for those who understand Bitcoin as the soundest money ever created, nothing can truly take that away. In fact, belief in Bitcoin as a store of value and medium of exchange will be strengthened by this Bitcoin-dollar strategy.
Sadly, after 16 years of trying to make Bitcoin as ubiquitous a unit of account as the dollar, some now recognize that in the medium term, the dollar and stablecoins will likely fulfill that use case. Bitcoin payments will never disappear, companies led by Bitcoiners will continue to emerge and should keep accepting Bitcoin as payment to build their reserves—but for the coming decades, stablecoins and dollar-denominated value will likely dominate crypto trade.
Nothing Can Stop This Train
As the world continues adapting to the rising power of the East and the emergence of a multipolar world order, the U.S. may need to make difficult and critical decisions to avoid lasting financial crisis. Theoretically, the U.S. could reduce spending, restructure, and become more efficient and competitive in the 21st century. The Trump administration is certainly attempting this, as shown by the tariff regime and related efforts to bring manufacturing back to the U.S. and cultivate local talent.
While several miracles might resolve America’s fiscal困境—such as sci-fi levels of labor and intelligent automation, or even the Bitcoin-dollar strategy—ultimately, even putting the dollar on a blockchain won’t change its fate: becoming a collectible for history buffs, a rediscovered ancient imperial token fit for museums.
The dollar’s centralized design and dependence on U.S. politics ultimately seal its monetary fate. But realistically, its demise may not arrive for 10, 50, or even 100 years. When that moment finally comes, if history repeats itself, Bitcoin should be there as the underlying rail—ready to pick up the pieces and fulfill the prophecy of hyperbitcoinization.
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