As the global landscape shifts from a unipolar order dominated by the United States to a multipolar arrangement led by BRICS nations, the U.S. dollar is under significant pressure. This transformation brings about declining demand for U.S. bonds and rising costs associated with the national debt. The recent passage of the Genius Act in July 2025 marks a decisive U.S. strategy to counteract these pressures by legalizing Treasury-backed stablecoins, which could unlock billions in foreign demand for U.S. bonds.
The blockchain technology that will support these stablecoins is expected to shape the global economic framework for decades. Bitcoin, known for its decentralization, privacy features through the Lightning Network, and robust security measures, is increasingly seen as the preferred infrastructure for this digital dollar transformation. This evolution is critical for the U.S. economy to navigate a soft landing from its current status as a global powerhouse.
The transition from a unipolar world order—a situation in which the United States exercised singular dominance in global markets and conflicts—to a multipolar world is becoming evident. This shift is characterized by the emergence of the BRICS alliance, which includes major players like Brazil, Russia, China, and India. The rising influence of these nations brings into question the enduring strength of the U.S. dollar system.
Several markers indicate this geopolitical reordering. Notably, the longstanding U.S. military alliance with Saudi Arabia and the support of petrodollar transactions is diminishing. Following the onset of the Ukraine conflict, Saudi Arabia has begun accepting various currencies for oil trade instead of exclusively using the dollar. This unravels a key pillar that had supported dollar demand since the 1970s.
Moreover, the U.S. bond market is losing its traditional appeal. Concerns regarding the U.S. government’s long-term creditworthiness have escalated, exacerbated by internal political instability and skepticism about the government’s ability to adapt in the fast-evolving, technology-driven global landscape. Prominent figures, including Elon Musk, have voiced doubts about the future of U.S. financial stability. Musk highlighted the concerning national debt levels, suggesting that without significant technological advances, the country faces an uphill battle.
The consequences of waning bond demand are profound. To lure investors back, the U.S. Treasury is compelled to offer higher interest rates, which, in turn, intensifies the financial burden of interest payments on the national debt—close to a trillion dollars annually. Should the U.S. fail to attract sufficient buyers for its debt, it may need to rely on the Federal Reserve to absorb this debt, a tactic likely to trigger inflation and further destabilize the economy.
The U.S. bond market deteriorated further in 2022 when the American government employed sanctions against Russia during the Ukraine invasion, which included freezing Russian treasury reserves. Although initially intended to compel compliance, these sanctions have had the unintended effect of alienating nations reluctant to align with U.S. foreign policy, leading to diminished confidence in U.S. bonds.
In this climate, new actors have emerged within the bond market. Tether, an influential financial technology company, now holds approximately $171 billion worth of U.S. bonds, making it a significant player alongside traditional holders like China. Tether’s business model benefits from issuing USDT, a stablecoin, backed 1-for-1 by equivalent U.S. Treasury bonds. The rise of Tether and stablecoins illustrates a growing global appetite for alternative currencies, especially in regions where local fiat experiences rampant inflation.
Chainalysis reported that stablecoins processed transactions amounting to trillions of dollars, demonstrating their importance in the global economic landscape. In regions like Latin America, where people seek refuge from volatile national currencies, stablecoins have gained increased traction, underscoring a broader push for dollar accessibility.
To effectively counter the emergence of alternative currencies, the U.S. recognizes the need for fresh demand for its bonds, achievable through the expansion of stablecoins. This initiative would not only facilitate access to dollar-denominated resources globally but also allow the U.S. to export dollar inflation and enhance user privacy in regions burdened by local government control.
However, despite the potential of stablecoins, there are critical considerations regarding their underpinning technologies. Most current stablecoins operate on centralized blockchains vulnerable to governmental oversight, unlike Bitcoin, which boasts an unparalleled degree of decentralization. Bitcoin’s infrastructure can protect user privacy and security while maintaining the integrity of transactions.
Critics of the Bitcoin-centered dollar strategy warn that this could compromise Bitcoin’s original vision as a revolutionary alternative to traditional finance. However, proponents argue that this strategic alignment could empower Bitcoin and enhance its value as an asset class, especially if it underpins the digital transformation of the dollar.
In the face of geopolitical and economic challenges, the U.S. must reevaluate its financial policies and potentially rethink its strategies to maintain relevance in an increasingly multipolar world. With the integration of blockchain technology into the financial system, the focus will likely shift towards leveraging existing advantages to mitigate impending risks, allowing the dollar to adapt, even as the broader economic landscape becomes more fragmented.
As the world navigates these transformative shifts, the role of Bitcoin and stablecoins will be pivotal in defining the future of currencies and the global financial framework.
