The GENIUS Act won't save the dollar

[NotATether]

this is an interesting article written a few days ago by Coindesk, about how the proposition of stablecoins isn't actually going to do much long term to help the dollar, especially as T-bond values are sinking to all-time lows.

Washington's GENIUS Act has crypto advocates celebrating clear stablecoin regulation. Politicians tout it as cementing dollar dominance for decades. The financial press frames it as America's masterstroke against competing currencies.

They're all missing the point. The GENIUS Act didn't create a protective moat around the dollar. It handed every other nation a blueprint for building their own digital currencies.

Regulatory Clarity Cuts Both Ways
The GENIUS Act deserves credit for bringing much-needed clarity to U.S. stablecoin operations. Clear reserve requirements, regulatory oversight, and compliance frameworks remove much of the uncertainty that has plagued the sector for years. Circle's USDC and other major operators can finally build without constantly looking over their shoulders for regulatory changes.

But while Washington celebrates this supposed victory for dollar dominance, the real story unfolds differently. The GENIUS Act establishes a regulatory template that other nations are already adapting for their own currencies. Japan's JPYC initiative, Hong Kong's digital currency framework, and emerging programs across Latin America and Asia all borrow heavily from America's approach.

The framework standardizes USD stablecoins without addressing the fundamental inefficiency that limits their global adoption: local liquidity gaps. Today's cross-border payments still rely on expensive, multi-step currency conversions that eat 3-6% in foreign exchange costs.

The Dollar Detour Problem
Consider a Brazilian worker in Japan trying to send money home. Under today's system, they must navigate a complex route of converting yen to dollars, purchasing USD stablecoins, and then converting to Brazilian reals. Each step incurs fees, delays, and counterparty risk.

This process makes little economic sense. Why should two non-dollar economies be forced through a USD intermediary?

USD stablecoins like USDC work brilliantly as bridge assets for institutional trading and DeFi applications. But for everyday cross-border payments between non-dollar economies, they introduce unnecessary complexity and cost, whereas neutral settlement layers enable cross-border liquidity without USD intermediation.

The Unintended Revolution
The GENIUS Act's global influence creates consequences its architects probably didn't anticipate. By providing a clear regulatory framework, it reduces the perceived risk of sovereign stablecoin projects worldwide. Countries no longer need to wonder whether digital currency regulation is feasible — they can adopt America's proven approach.

Japan's Digital Agency has already announced plans for yen-backed stablecoins using compliance frameworks inspired by U.S. legislation. Hong Kong's monetary authority is developing similar standards for digital Hong Kong dollars. Brazil, Mexico, and other emerging economies are crafting their own versions.

Programmable foreign exchange between sovereign stablecoins could reduce cross-border costs below 0.1% while eliminating settlement delays. The vision resembles CLS Bank's multilateral settlement system, but without USD hegemony. Foreign exchange without dollar gatekeepers.

Regulatory Harmony Means No Monopoly
The GENIUS Act succeeds as policy precisely because other jurisdictions can replicate its approach. Regulatory harmony across major economies reduces compliance complexity for global stablecoin operators while enabling seamless cross-border integration.

But this same harmonization prevents any single currency from monopolizing digital payments. When every major economy offers compliant local stablecoins, market forces will determine adoption patterns rather than regulatory barriers.

Circle's USDC benefits from first-mover advantages and deep DeFi integration, making it an excellent bridge asset for institutional applications. However, consumer payments will likely gravitate toward local stablecoins that eliminate foreign exchange friction and provide a familiar denomination.

European regulations under MiCA are creating similar frameworks for euro-denominated stablecoins. Asian financial centers are developing parallel structures for yen, won, and other regional currencies. Latin American countries are exploring peso and real-backed alternatives.

The result resembles traditional correspondent banking networks more than dollar hegemony. Each currency maintains its local utility while gaining programmable capabilities for international settlement.

Network Effects Work Both Ways
Stablecoin adoption follows network effects similar to other digital platforms. Early users gravitate toward established options with deep liquidity and broad acceptance. This initially favors USD stablecoins due to their head start and existing DeFi integration.

However, network effects also reward local utility. A Mexican business paying suppliers in pesos has little reason to hold dollar-denominated stablecoins beyond transaction settlement. Local stablecoins eliminate currency risk while providing the same programmable money benefits.

The strongest network effects emerge around specific use cases rather than abstract store-of-value properties. Payroll systems, supplier payments, and consumer remittances all benefit from denomination matching that eliminates foreign exchange exposure.

Multi-currency stablecoin infrastructure resembles email protocols more than traditional monetary systems. Just as Gmail users can communicate with Outlook users through standardized protocols, peso stablecoins can settle with yen stablecoins through interoperable smart contracts.

The Plural Future of Money
The GENIUS Act represents a crucial step toward digital currency maturity, but not for the reasons its supporters claim. Rather than cementing dollar dominance, it validates the concept of sovereign digital currencies for every major economy.

The future financial system will likely feature dozens of compliant stablecoins representing major currencies, all interconnected through programmable settlement layers. Dollar stablecoins will play important roles in this ecosystem without necessarily dominating it.

For policymakers, the lesson is clear. Regulatory clarity accelerates innovation while protective barriers become obsolete.

The GENIUS Act didn't crown the dollar as king of digital money. It proved that the future belongs to whoever builds the best infrastructure for local currency digitization. That's a competition America can win, but only by competing on merit rather than relying on incumbent advantages.

The stablecoin revolution is just beginning, and it will be gloriously plural.

To cut through the noise:

Remember when governments were talking about banning stablecoins along with bitcoin and the rest of crypto? Well when all of those clamors stopped, crypto companies and in particular stablecoin issuers were never quite sure whether they were operating in the framework of the law. GENIUS addressed this problem quite well, and while stablecoins like USDC and USDT were a good solution for crypto users who interacted with websites using such coins, it's still quite a burden for people who conduct international remittances.

You know, as in people sending money from one country to another.

Currently that's done offline in a very expensive banking system that eats FX fees, but if more countries get their act together and start launching their own stablecoins, then a framework can exist to allow people to make sure more money reaches their family & friends. FX will be much cheaper.

And it can all be based on the structure that the GENIUS bill made.


This bill was never about stopping the dollar from devaluing or inflating by the way, that was never going to happen. People just want first-mover advantage in the stablecoin market so that they can get the slice of revenue that local and international banks currently take.

[pooya87]

Just wait until they figure out that other countries moved in that direction a long time ago and US is not the "first mover", they are just the loudest about it. We even already have a couple of CBDCs which are pretty much a safer version of stablecoins that are active and would server well for cross border transactions specially when many of them are created by countries in the same bloc (eg. BRICS members) and in the future as the adoption grows they can have Atomic Swap-like features which I speculated about 3 years ago:

There may even be some silver lining that these CBDCs could replace the stable-coins in the market in the near future and we end up even seeing Atomic Swap capabilities added where you could easily swap one CBDC for another or for bitcoin without the risk of centralized stablecoins (issued by shady companies). That would definitely simplify things for traders while significantly reducing the risks they take.

[mindrust]

Soon it won’t matter a bit probably as the Easterners dump t-bills, gold is sky rocketing. (An ounce of gold is $3643 atm) This is important because gold and silver ($42.19) are also being used as industrial materials, not only jewelry and store of value.

Only a few years ago gold was below $2000 and silver was ~$25. Silver is moving a little bit slower and that means there might still be an opportunity there.

Anyway my point is, if these prices are here to stay, expect another huge inflation wave.

And what’s their solution? Print more usd via tether and co? Great plan, that will definitely save the dollar.

[EluguHcman]

Remember when governments were talking about banning stablecoins along with bitcoin and the rest of crypto? Well when all of
those clamors stopped, crypto companies and in particular stablecoin issuers were never quite sure whether they were operating in the framework of the law. GENIUS addressed this problem quite well, and while stablecoins like USDC and USDT were a good solution for crypto users who interacted with websites using such coins, it's still quite a burden for people who conduct international remittances.

You know, as in people sending money from one country to another.

Currently that's done offline in a very expensive banking system that eats FX fees, but if more countries get their act together and start launching their own stablecoins, then a framework can exist to allow people to make sure more money reaches their family & friends. FX will be much cheaper.

Absolutely the genius act had said it right and in other for every countries to encourage their own traditional currencies to gain valuable importance and also stay in the global recognitions to send their own traditional currencies across the borders, it should be expected that every countries should with good economy evaluation should consider launching their own stable coins to embrace their own instead of others like the dollar, Euro, Yen and the rest.
I am specifically directing this to my country Nigeria that does not have our e-Naira digital currency pegged on the Blockchain transaction network where transaction boundaries is limitless.

So if we can also have our own stable coins in the network some bit stresses such as the bank fees will be limited and would be an encouragement of Speculating our own currency instead of the tied on the USD whenever we want to do transaction from the Bitcoin decentralized to centralized ecosystem.

[Lucius]

~snip~
And what’s their solution? Print more usd via tether and co? Great plan, that will definitely save the dollar.

It is not in the interest of those in power to save $, but to fill their bags with as much profit as possible in the next 3+ years while they are in power. The politics of one of the most powerful countries in the world has sunk so low that it was hard for anyone to imagine 15-20 years ago.

A president who just likes to talk a lot and constantly be in the public eye (already thinks he deserved the Nobel Peace Prize - for what?), his associates who are completely incompetent at what they do and who also agree on national security strategies through various apps in which they then invite people who shouldn't be there at all.

The US dollar is still holding, but the country seems to be falling apart from within as it is deeply divided politically, and instead of democracy and the rule of law, violence is being used to deal with those who think differently.

[pooya87]

Only a few years ago gold was below $2000 and silver was ~$25. Silver is moving a little bit slower and that means there might still be an opportunity there.

I sometimes try to have one eye on silver but I don't think it has the same potential as gold.
The gold price rise is both because people keep buying it as an investment and a hedge against the failing global economy and also the central banks of many countries have been accumulating it over the past couple of years due to the increasing global tensions that are not going to get any better any time soon.

But silver is only going up because gold went up and people were buying it. I don't think any country is majorly investing in silver as a reserve due to increasing conflicts.

[davis196]

Consider a Brazilian worker in Japan trying to send money home.

How many Brazilian workers are currently living in Japan? This example is really stupid. Japan is definitely not a migration-friendly country and Brazilians wouldn't pick Japan as their first option to go overseas and work.
Anyway, the whole article is wasting lots of words and sentences without saying anything important. OK, regulatory clarity is great for crypto and stablecoin companies. This is the only conclusion about the GENIUS act.
The theories about mass adoption of stablecoins saving the US dollar are just stupid. The US dollar will be saved in two ways:
1.The USA having a balanced federal budget and paying it's debts.
2.The US dollar and payment systems no longer being weaponized for sanctions.

[Abiky]

this is an interesting article written a few days ago by Coindesk, about how the proposition of stablecoins isn't actually going to do much long term to help the dollar, especially as T-bond values are sinking to all-time lows.

...
To cut through the noise:

Remember when governments were talking about banning stablecoins along with bitcoin and the rest of crypto? Well when all of those clamors stopped, crypto companies and in particular stablecoin issuers were never quite sure whether they were operating in the framework of the law. GENIUS addressed this problem quite well, and while stablecoins like USDC and USDT were a good solution for crypto users who interacted with websites using such coins, it's still quite a burden for people who conduct international remittances.

You know, as in people sending money from one country to another.

Currently that's done offline in a very expensive banking system that eats FX fees, but if more countries get their act together and start launching their own stablecoins, then a framework can exist to allow people to make sure more money reaches their family & friends. FX will be much cheaper.

And it can all be based on the structure that the GENIUS bill made.


This bill was never about stopping the dollar from devaluing or inflating by the way, that was never going to happen. People just want first-mover advantage in the stablecoin market so that they can get the slice of revenue that local and international banks currently take.

Perhaps, you're right. Stablecoins or a US-backed CBDC will have little or no effect over the USD's prominence as the world's reserve currency. Trump's trade policies are already affecting the Dollar. It's very unlikely things will change if the USD becomes "digitized". Still, USD-backed stablecoins are the largest ones in market cap. Their EUR counterparts don't come even close. Maybe that will give the US an advantage?

What the government needs to do is back the USD's value with Bitcoin. Or at least, focus on paying the national debt. The latter seems very unlikely now that Congress approved Donald Trump's "One Big Beautiful Bill" spending plan. The debt is projected to increase $3.4T in the national debt within the next 10 years. So the US' days of collapse are certain. Empires rise and fall. The US is no exception. Perhaps, BRICS will take over the world? Only time will tell.

[EluguHcman]

Only a few years ago gold was below $2000 and silver was ~$25. Silver is moving a little bit slower and that means there might still be an opportunity there.

I sometimes try to have one eye on silver but I don't think it has the same potential as gold.
The gold price rise is both because people keep buying it as an investment and a hedge against the failing global economy and also the central banks of many countries have been accumulating it over the past couple of years due to the increasing global tensions that are not going to get any better any time soon.

But silver is only going up because gold went up and people were buying it. I don't think any country is majorly investing in silver as a reserve due to increasing conflicts.

I think the consensus of silver and gold is like that of the derivations between Bitcoin and Ethereum.
We have experience severally about how Ethereum derives it price performance from the Bitcoin market which I believe the same protocols may be effective on the gold and silver market.

In no doubt... Institutions, governments, banks and individual investors has obviously been partaking in investing majorly on Bitcoin for reserve and hedging against devaluation of the fiats in the forthcoming of economy inflations while investing on the Ethereum maybe an alternative without investing aggressively in it like Bitcoin due to the level of their rate of volatilities to control price while keeping values safe haven.

So apparently gold is in place of Bitcoin while Silver will be in place of Ethereum. Perhaps these is subjective to demonstrate the potentials of both silver and gold in dominance of how they are reasonably adopted.

[Haunebu]

The dollar isn't as strong as it once which is exactly what Trump wanted and he probably signed this for his own ulterior motive and not because he wants to try and save the dollar or something.

The USD has been dropping in value since January this year and I truly wonder what exactly happened during that month to trigger such a decline....

[Webetcoins]

The dollar isn't as strong as it once which is exactly what Trump wanted and he probably signed this for his own ulterior motive and not because he wants to try and save the dollar or something.

The USD has been dropping in value since January this year and I truly wonder what exactly happened during that month to trigger such a decline....

Logic is simple, not a smart one, but a simple one. If dollar is "too" strong, Americans are richer, but American companies are poorer.

Because the numbers are smaller, and the gap is closer. If you have a nation where person makes 100 bucks, and company makes 1000, it's different than having a country where person makes 1000 but company makes 10k.

Why the difference? Because that would allow company to get even more shares between each other, some goes to tesla, some goes to amazon, some goes to something else. That is the most important part, and you have to do that to make it cheaper.

Plus, it allows Americans to work for cheaper as well, value drooped in dollar means people will be working for cheap, and salaries won't go up as much as inflation, hence you could find cheaper workers, and instead of buying from other nations, you will make your own products with wage-slaves.

[Findingnemo]

Only a few years ago gold was below $2000 and silver was ~$25. Silver is moving a little bit slower and that means there might still be an opportunity there.

I sometimes try to have one eye on silver but I don't think it has the same potential as gold.
The gold price rise is both because people keep buying it as an investment and a hedge against the failing global economy and also the central banks of many countries have been accumulating it over the past couple of years due to the increasing global tensions that are not going to get any better any time soon.

But silver is only going up because gold went up and people were buying it. I don't think any country is majorly investing in silver as a reserve due to increasing conflicts.

Some of the so-called investment experts are suggesting silver is the next gold and blah blah but the craze on gold is unmatchable and people will never see silver in that way. To put this into context, LTC is the next Bitcoin, so just keep buying the LTC instead of Bitcoin but we all know what the difference is and Bitcoin is bitcoin, others can't take it's place.

[Abiky]

The dollar isn't as strong as it once which is exactly what Trump wanted and he probably signed this for his own ulterior motive and not because he wants to try and save the dollar or something.

The USD has been dropping in value since January this year and I truly wonder what exactly happened during that month to trigger such a decline....

Trump's plan from the very beginning was to bring back manufacturing to the US. In order to make exports cheaper, it's in Trump's best interests to weaken the Dollar. This will also make the debt cheaper in the long run. Unfortunately, a weaker USD comes at a cost of expensive imports for all Americans. The GENIUS act will only solidify the USD's presence in the stablecoins market. But it won't save the Dollar. Especially if countries start ditching it in favor of other currencies.

The "de-dollarization" movement is getting stronger each day. With BRICS composing around 40% of the world's population, the USD's days are numbered. This rival bloc can simply come up with a currency of its own, possibly taking the USD's place as the world's reserve currency. For what I know, anything's possible in the future. We'll see what happens...

[Cryptohygenic]

The dollar isn't as strong as it once which is exactly what Trump wanted and he probably signed this for his own ulterior motive and not because he wants to try and save the dollar or something.

The USD has been dropping in value since January this year and I truly wonder what exactly happened during that month to trigger such a decline....

If I were you, I won't be worried about that drop of dollars value. Or did we forget too quick that the fiats never at all have an intrinsic backup? Let's not be deceived I hope there will still be a good time to remedy to course of fiats loosing it against inflations. The USD has only tried to maintain it values in the international markets and if not of every active presidents that would try it best to position the economy in good dimensions where if evaluated would bring credit to their regimes, the dollar would had crashed below what it holds today. Trump may also be trying it best to rescue the dollar but if it does not workout may not literally mean it is part of his plans. The truth is that the fiats will keep loosing values. If it is accustoming economy blames, that I will be agreed that he may have ulterior motives because his is not a saint that is likely uncorruptible like others may be selfish.

[coolcoinz]

The dollar is in deep shit because of the printing they did during covid. The US was in debt already with high inflation, but somehow pulling through, but that 2021 print basically put the currency on a downward spiral. They can fool around hiking rates and lying to people that they want 2% inflation. First it was below 2% now 2% is fine. The problem is they used to be at 2.7 now they're cutting and inflation is already 2.9 before they could even start. They're never going to get that 2% and they know it and stablecoins are shit. It's still fiat money. You can change the wrapper on an old candy, but it's still going to taste bad. You're not fooling anyone.

[Oluwa-btc]

The dollar isn't as strong as it once which is exactly what Trump wanted and he probably signed this for his own ulterior motive and not because he wants to try and save the dollar or something.

The USD has been dropping in value since January this year and I truly wonder what exactly happened during that month to trigger such a decline....

The dollar fell because trust weakened debt & policy returns weakened,rate cuts and other economies even de-dollarization inclusive.Normally the dollar is considered a safe haven as it strengthens when there’s global uncertainty.But the combination of these factors led to another drop and weaknesses.

[Swordsoffreedom]

The dollar isn't as strong as it once which is exactly what Trump wanted and he probably signed this for his own ulterior motive and not because he wants to try and save the dollar or something.

The USD has been dropping in value since January this year and I truly wonder what exactly happened during that month to trigger such a decline....

The dominance of the USD has been on the decline since the 2000s and has tended to increase more in recent years due to the process of de dollarization.

The decline in the strength of the US dollar is not just caused by Trump or just happening this year. The root cause of this decline is that the world is losing faith in the United States after what they have done to the world over the past decades. Trump is just the catalyst for making the USD situation worse through his tariff policy with US allies and the world. Even without Trump, a weaker dollar is inevitable.

[Abiky]

The dollar is in deep shit because of the printing they did during covid. The US was in debt already with high inflation, but somehow pulling through, but that 2021 print basically put the currency on a downward spiral. They can fool around hiking rates and lying to people that they want 2% inflation. First it was below 2% now 2% is fine. The problem is they used to be at 2.7 now they're cutting and inflation is already 2.9 before they could even start. They're never going to get that 2% and they know it and stablecoins are shit. It's still fiat money. You can change the wrapper on an old candy, but it's still going to taste bad. You're not fooling anyone.

And it's going to get worse. Especially when Donald Trump's "One Big Beautiful Bill" was recently signed into law. It promises to increase the national debt by an additional $3T within 10 years. The USD's days are numbered.

Right now, there are many countries moving full-speed ahead with the "de-dollarization" process. BRICS is the biggest bloc of nations aiming to compete against the USD with its very own currency. With giants such as Russia, China, India, and Brazil in the bloc, US' hegemony is about to come to an end. Stablecoins won't propel the USD towards new heights. Not if countries are using other currencies on top of it for global trade. We'll see what happens in the future.

[Lucius]

~snip~
With giants such as Russia, China, India, and Brazil in the bloc, US' hegemony is about to come to an end. Stablecoins won't propel the USD towards new heights. Not if countries are using other currencies on top of it for global trade. We'll see what happens in the future.

For what reason do you call Russia gigantic in any sense? That country has been waging an aggressive war for three years and, despite all its attempts, has failed to achieve its goals - and realistically, it would already be economically bankrupt if it were not for the help of countries like North Korea, Iran, China and India.

BRICS is just an idea, but it is far from something that can function successfully in reality, regardless of the countries that are in it. The US, EU, UK, Japan, Canada and some other countries are still very strong economic forces that you can't just ignore and pretend they don't exist.

The US dollar may be in trouble (when it wasn't), but I have no doubt that they (the US) and their allies still have a few tricks up their sleeves.

[avp2306]

~snip~
With giants such as Russia, China, India, and Brazil in the bloc, US' hegemony is about to come to an end. Stablecoins won't propel the USD towards new heights. Not if countries are using other currencies on top of it for global trade. We'll see what happens in the future.

For what reason do you call Russia gigantic in any sense? That country has been waging an aggressive war for three years and, despite all its attempts, has failed to achieve its goals - and realistically, it would already be economically bankrupt if it were not for the help of countries like North Korea, Iran, China and India.

BRICS is just an idea, but it is far from something that can function successfully in reality, regardless of the countries that are in it. The US, EU, UK, Japan, Canada and some other countries are still very strong economic forces that you can't just ignore and pretend they don't exist.

The US dollar may be in trouble (when it wasn't), but I have no doubt that they (the US) and their allies still have a few tricks up their sleeves.

Maybe for geographic landscape then yes they are gigantic with that aspects.

But with current challenges facing by Russia and its war against Ukraine their vulnerabilities has been exposed.

They are now experiencing military setback, there economy is also fragile since they are dealing only with few countries and also they are facing serious issues due to those sanctions happened in their country which crippled their economy.

Many say that dollar is in trouble but for longest time it proves that this is dominant currency in the world despite of those troubles they are facing.