Stablecoins, Sovereignty, and the New Currency Wars

While Washington has quietly shelved the idea of a retail central bank digital currency (CBDC) until 2030, it has embraced something arguably more consequential: a federally blessed private-sector alternative built entirely on U.S. debt.

Using Crypto to Finance Debt at Home

Last year’s GENIUS Act requires dollar-pegged stablecoins to hold reserves in cash or short-term Treasury bills. Treasury Secretary Scott Bessent has said the stablecoin market could grow toward $2 trillion or more in the coming years, creating a substantial new buyer for the short-term government debt Washington is issuing at record pace as the national debt closes in on $40 trillion. A Brookings Institution study puts the plausible range at $400 billion to $2.3 trillion in new Treasury-bill demand by 2030. The government has found a way to make crypto adoption finance its own borrowing, without ever calling it a CBDC.

Meanwhile, the BRICS bloc is moving in the opposite direction. All BRICS member nations are exploring their own central bank digital currencies, and several are already piloting cross-border digital-currency links explicitly designed to settle trade without touching the dollar. India has floated linking member states’ digital currencies for exactly that purpose. The result is a bifurcated global monetary order: Washington leaning on privately issued, dollar-backed stablecoins to extend the dollar’s reach, and a rival bloc building state-run digital currencies to escape it.

Engineering Instability Abroad

That contrast has fueled a theory by Santiago Capital’s Santiago Velez and journalist Whitney Webb: U.S. policy (e.g., sanctions threats against countries trading with Iran, tariff shocks, and other sources of global instability) is being deliberately used to trigger dollar shortages abroad, forcing nations to burn through reserves and drive up demand for dollar-denominated assets and stablecoins. Proponents note that Bessent’s history is well documented: As a young analyst at Soros Fund Management, he played a central role in the 1992 “Black Wednesday” sterling crisis, and helped engineer a large bet against the Japanese yen in 2013.

That résumé is a matter of record. Whether it amounts to evidence of a deliberate, present-day strategy to engineer instability abroad is a separate and far-more speculative claim. What is documented, though? Federal policy is now structurally intertwined with the growth of the stablecoin market, a sitting Treasury secretary has a track record of profiting from currency instability abroad, and rival powers are actively building infrastructure to reduce their dependence on the dollar. Outside observers can draw their own conclusions about intent, but the underlying facts alone raise real questions about who benefits, and at what cost to nations with fewer options, when the dollar system comes under strain. 

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