Written by: Wang Yang, Bai Liang, Zhang Xueyi

History will remember this moment: On June 17, 2025, the U.S. stablecoin "GENIUS Act" was passed in the Senate.

On June 19, U.S. Treasury Secretary Basent stated that the stablecoin ecosystem would drive private sector demand for U.S. Treasury bonds, potentially lowering borrowing costs, helping to control national debt, and attracting global users to join the dollar-based digital asset economy. He believes that cryptocurrencies do not pose a threat to the dollar; rather, stablecoins can reinforce the dollar's hegemonic status. The U.S. government is committed to making the U.S. a center for digital asset innovation, and the "GENIUS Act" helps achieve that goal.

Basent and others may think they have just equipped the dollar hegemony with a rocket booster for the digital age, but they may also have ignited a spark that could rapidly weaken the dollar's dominance.

Dollar hegemony is not merely a monetary phenomenon—it is a vast power matrix constructed by international institutions such as the IMF and World Bank, a global financial network, a credit rating system, financial sanctions, and neoliberal ideology. As economist Li Xiao puts it, this is a system with "comprehensive, systematic, and powerful hard and soft power." (Li Xiao, "Dual Impact")

Stablecoins present a paradox for dollar hegemony: they may increase demand for dollars and U.S. Treasury bonds in the market, while simultaneously opening the source code that could lead to the dollar's loss of control.

Undeniably, stablecoins are a super stimulant for dollar hegemony in the short term: every African farmer downloading a crypto wallet, every Asian merchant trading with USDT, and every European programmer holding USDC may inadvertently become digital citizens of the dollar empire.

The power of network effects may bolster dollar hegemony in the era of stablecoins. When the first financial experience of the global young generation is a dollar stablecoin wallet, and their value perception is forever anchored at "1 USDC = 1 USD," the dollar completes its transformation from currency to measure. This is no longer simple currency use, but rather a form of mental colonization—thinking in dollars, pricing in dollars, dreaming in dollars.

According to the requirements of the "GENIUS Act," every stablecoin must be backed by U.S. Treasury bonds, and Japan's position as the largest holder of U.S. debt will soon become a submerged historical footnote.

Stablecoins are creating a new history. However, at this new historical crossroads, stablecoins will inevitably weaken the hegemonic power of the traditional dollar system, cutting off its limbs; at the same time, this new crossroads also offers new possibilities, as stablecoins face greater uncertainty in extending their hegemonic path in the new era.

Stablecoins are a double-edged sword for dollar hegemony, and the edge facing themselves is equally sharp.

Those "Dollar Weapons" About to Lose Their Usefulness

Technology has its own logic, and this logic is merciless to power. The most deterrent aspect of traditional dollar hegemony is the weaponization of the dollar by the U.S. for economic sanctions. However, stablecoins operate outside this traditional dollar system, rendering these weapons useless.

The U.S.-led SWIFT and CHIPS can be considered its financial nuclear weapons. The former connects over 11,000 financial institutions globally, covering more than 200 countries and processing 80% of cross-border payment information; the latter monopolizes 95% of global dollar transaction clearing. For the past 20 years, Washington has been able to cut off the financial lifeblood of any country at will, like manipulating puppets.

But stablecoins render this "dollar weapon" obsolete: users only need a string of alphanumeric wallet addresses to complete cross-border transfers in seconds. Banks, SWIFT, and even compliance checks may not be necessary—only cryptographically guaranteed peer-to-peer value transfer (in the development of cryptocurrencies, decentralized markets outside of compliance checks will always exist).

It's like inventing a portal but discovering that you cannot control who uses it. The U.S. Treasury can sanction bank accounts, but how can it sanction the vast sea of anonymous wallets and blockchain addresses worldwide? Although the U.S. and other economies will strengthen regulation of stablecoins, the government's control in the cryptocurrency ecosystem where stablecoins exist will diminish compared to the traditional monetary system, helplessly declining. It's like the ultimate version of a whack-a-mole game—moles have infinite lives, while the hammer is limited.

Not only do hard weapons fail to exert power, but the soft power pillars of dollar hegemony will also gradually lose influence within the stablecoin system.

For example, in traditional financial markets, S&P, Moody's, and Fitch dominate 96% of the global rating business, and the Big Four accounting firms guard the gates of the financial system—but on the blockchain ledger, their role is minimal. When every transaction is recorded on a public ledger, when smart contracts execute automatically without trust, and when algorithms replace human judgment, how much value do rating agencies still hold? The gatekeepers of traditional finance find that the gates have disappeared.

Global financial rules are being rewritten, and Washington's original "financial weapons" are becoming ineffective. And on this new starting line, the U.S. is not the only player.

From "Fear of System Collapse" to "Fear of System Lag"

Dollar hegemony has created a "fear of system collapse"—the cost of overthrowing the system far exceeds the cost of enduring exploitation. On one hand, countries within the system cannot change the rules individually, and such fundamental changes are unlikely to occur in the short term; on the other hand, although countries within the system face increasing costs from dollar exchange rate fluctuations, contradictions between monetary policy and economic cycles, and various monetary and financial risks, the cost of overthrowing the system is even greater. (Li Xiao, "Dual Impact")

This "fear of system collapse" has been nearly unbreakable for decades, making the traditional dollar system the most successful case of Stockholm syndrome in history: countries know they are being held hostage but "love" their captor because leaving would lead to worse outcomes.

However, stablecoins create a new opportunity for the global monetary system. Stablecoins do not operate entirely within the traditional dollar system; as mentioned earlier, many tools and facilities of the traditional dollar system are of no use to stablecoins.

Moreover, in this newly emerging system, various economies have the opportunity to start anew. European institutions like Société Générale are planning to launch euro stablecoins, institutions like JD.com are testing Hong Kong dollar stablecoins, and StraitsX just launched a Singapore dollar stablecoin in May this year. Many small and medium-sized economies in the Third World are preparing their own stablecoins.

More importantly, most stablecoins are issued by commercial entities, shifting their credit foundation from "national sovereignty" to "corporate credit" and "asset credit." Therefore, an era of flourishing diversity is bound to arrive.

In April 2023, the EU released the "Regulation on Markets in Crypto-Assets" (MiCA), and in August 2023, Singapore announced a stablecoin regulatory framework. On May 21, 2025, Hong Kong's "Stablecoin Ordinance" was passed. Major economies are also prioritizing the competition for stablecoin rules. The release, revision, and promotion of regulatory laws, regulations, and guidelines in various countries will become key to future stablecoin competition.

Although the "fear" brought by the traditional dollar system still exists, the balance has already tilted. The cost of remaining in the old system is rising daily—arbitrary interest rate hikes by the Federal Reserve, random sanctions by the U.S., and the weaponization of the dollar are becoming more severe. Meanwhile, the threshold for joining the new system is lowering every day—open-source code is available for free download, technical solutions are readily available, and regulatory frameworks are being copied among countries. When escaping becomes safer than being imprisoned, the "fear of system collapse" will transform into a "fear of system lag."

Historical Reflection: The Lessons of Eurodollars

History does not repeat itself, but it does rhyme—and this time it's a fast-paced version.

After World War II, dollars from the Marshall Plan flooded into Europe. In the 1950s, the Soviet Union, fearing that the Cold War would escalate and lead to the freezing of dollar assets, decisively transferred its money to banks in London and Paris.

This defensive move suddenly made European bankers realize a shocking fact: these dollars were not subject to U.S. law or the oversight of the U.S. reserve system. Thus, a parallel dollar universe was born—the Eurodollar market, a shadow dollar empire beyond the reach of the Federal Reserve.

The oil crisis of the 1970s brought a torrent into this market. Middle Eastern petrodollars flowed into London and then from London to Latin America, forming a "dollar circulation system" that completely bypassed the U.S. This system, on one hand, reinforced the global status of the dollar—from London to Singapore, from the Cayman Islands to Hong Kong, the world was using dollars—while on the other hand, it rendered the Federal Reserve's monetary policy ineffective.

Over the decades, Eurodollars transformed from a trickle into a vast ocean, reaching hundreds of trillions of dollars.

If Eurodollars were "civilized" rebels—they still needed bank licenses, SWIFT messages, and some form of financial infrastructure; transactions occurred in bankers' conference rooms, and settlements were completed through polite telexes; even though they were no longer under the control of the Federal Reserve, they still operated within the framework of the traditional financial system—stablecoins, however, are almost a fresh start.

First, there is a difference in speed. Eurodollars settle in days, while stablecoins confirm in seconds. Eurodollars require bank operating hours, while stablecoins operate 24/7 without interruption. If Eurodollars are a chronic illness for the Federal Reserve, stablecoins could lead to an acute myocardial infarction—arriving too quickly, blocking too severely, and being too difficult to rescue.

Secondly, the difference in entry barriers is vast. What is needed to participate in the Eurodollar market? Banking relationships, credit lines, compliance departments, back-end systems. Creating a stablecoin only requires a button; everyone has the opportunity to obtain stablecoins. When the threshold for creating currency drops from skyscrapers to basements, the rules of the game change completely.

The most fatal difference lies in the degree of decentralization. Although Eurodollars are detached from the Federal Reserve, they still circulate within the traditional financial system. Stablecoins have both regulated and unregulated issuers and operators; there are centralized issuing institutions as well as decentralized issuing platforms; their infrastructure is on public chains, with countless nodes spread across the globe. The entire internet becomes a vast "offshore financial center," omnipresent yet elusive.

Stablecoins may create a massive, globalized dollar liquidity that is not under U.S. control. The effects of U.S. monetary policy globally may significantly weaken as a result. When dollar stablecoins can be collateralized with non-dollar assets, and when every country can create "dollars" using its own assets, the number of stablecoins will increase, but the "faith" in U.S. Treasury bonds will weaken.

Future Battlefield: The War of "Synthetic Currencies"

The gears of innovation are turning in one direction: towards more functionality and less control. And now this gear is turbocharged.

The "GENIUS Act" defines "standard stablecoins"—highly liquid dollar asset reserves, dollar pricing, and U.S. regulation. Washington's bureaucrats believe they can monopolize the rules of the game this way. However, in the world of code, forking is easier than following.

In addition to the stablecoins defined by the U.S. "GENIUS Act," at least three other types of stablecoins are continuously emerging and circulating:

First, stablecoins that are not backed by dollar assets but are priced in dollars. The stablecoin DAI is collateralized by crypto assets and maintains a 1:1 peg to the dollar, becoming a widely accepted stablecoin in the cryptocurrency market. Similarly, it is not hard to predict that there will be dollar stablecoins issued with renminbi assets, and dollar tokens backed by Japanese government bonds, as long as there are market-convincing assets and issuance mechanisms.

Second, stablecoins that are backed by dollar assets but are not priced in dollars. For example, China holds nearly $800 billion in Treasury bonds; why can't it use them as reserve assets to issue stablecoins priced in renminbi or Hong Kong dollars? Japan, Saudi Arabia, and Singapore all have large dollar reserves and can play this game. Dollar assets have become an arsenal, and the U.S. cannot stop others from firing.

Third, stablecoins that are neither backed by dollar assets nor priced in dollars. Renminbi stablecoins, euro stablecoins, yen stablecoins, and various versions of stablecoins supported by fiat assets are flourishing.

Even more uncontrollable is that RWA (Real World Asset Tokenization) has opened Pandora's box—real estate tokens, commodity tokens, carbon credit tokens… "Everything can be tokenized." These tokens could potentially be used as collateral for issuing stablecoins, and there are already numerous cases of such stablecoins in the cryptocurrency market. Although currently, these stablecoins do not receive mainstream regulatory support and have a small market share, innovation often sprouts from blank or marginal markets. With the development of the RWA market and the further prosperity of the Web 3.0 ecosystem, along with the continuous adaptation between the market and regulation, this type of stablecoin is likely to thrive.

As a result, a large number of "synthetic currencies" will appear in the market. In traditional finance, synthetic currencies, also known as composite currencies, refer to a currency accounting unit artificially created, where the value of each accounting unit is a mixture of several currencies' values in certain proportions. Typical synthetic currencies include the IMF's Special Drawing Rights and the European Currency Unit.

The development of stablecoins will give rise to a large number of synthetic currencies, which could be synthetic dollars or synthetic currencies priced in other denominations. What is certain is that in response to market demand, global stablecoin issuers will provide the most attractive synthetic dollars or other synthetic currencies: better support, faster settlement, lower fees, and fewer issues. Regulatory arbitrage based on stablecoins is an important issue facing global regulation and also a significant challenge to dollar hegemony.

Upcoming Scenario: A Significant Reduction in Dependence on the Dollar

People's dependence on the dollar itself is diminishing irreversibly, and in the future, many may not even know that there is another form of "dollar" beyond stablecoins. The rapid promotion of stablecoins, especially in transactions within the real economy, will reduce the frequency with which people use dollars.

First, even if the market share of dollar stablecoins is the highest, it will still lower the usage rate of dollars. Although each dollar stablecoin is generated when users purchase it from issuers with dollars, as the application scenarios for stablecoins increase, people will use stablecoins conveniently and frequently, significantly reducing the necessity to convert stablecoins back to dollars. In fact, the market's demand for dollars is weakening.

Currently, the main trading scenarios for stablecoins are in the cryptocurrency field, such as cryptocurrency exchanges and decentralized finance (DeFi), with a very low proportion of transactions actually used for trade, consumption, and other production and living scenarios. However, as companies like Walmart, Amazon, JD.com, and Ant Group issue stablecoins, the proportion of stablecoins used in trade and consumption scenarios is increasing, and stablecoins will replace traditional currencies, becoming the primary medium of circulation. This means that a large number of stablecoins issued will not be redeemed but will enter the circulation field, reducing the demand for real currency—looking at the current structure of currency circulation, the number of dollars as the main circulating currency being replaced will also increase.

Second, with the diversification of stablecoin issuers and pricing currencies, the differentiated regulation among various economic entities, and the continuous innovation in decentralized markets that are difficult to regulate, the variety of stablecoins available to users is increasingly rich. Whether dollar stablecoins can maintain their absolute advantage in the entire stablecoin market remains highly uncertain, as everything is just beginning. Competition from other currencies may also reduce the market's dependence on the dollar.

Conclusion: The "Dollar Stablecoin Hegemony" Should Not Be Underestimated

We emphasize that the counteraction of stablecoins against dollar hegemony does not diminish the value of dollar stablecoins in maintaining that hegemony, nor should we underestimate the advantages the U.S. holds in stablecoins and its ambition to shape a stronger dollar hegemony.

In fact, dollar stablecoins currently dominate the market, with a market share exceeding 90%, which is much higher than the dollar's share in the traditional financial system.

As mentioned at the beginning of this article, dollar stablecoins expand the market demand for dollars and support for U.S. Treasury bonds. The U.S. government does not hide its "ambition." Basent stated, "This administration is committed to maintaining and strengthening the dollar's status as the reserve currency," and "legislation for stablecoins backed by U.S. Treasury bonds or short-term Treasury bills will create a market that expands the use of the dollar globally through these stablecoins."

However, the development of stablecoins has just begun, and the rules of the stablecoin game are also just beginning to be established. In this upcoming new world, who will become the rule-maker, and who is destined to be the rule-taker? The answer lies in who can better meet market demands—the answer is in every line of code written, in every wallet created, and in every cross-border transaction.

As the world's second-largest economy, as one of the largest creditors to the U.S., and as a leader in the digital economy, China has the resources, technology, and market to reshape the global monetary landscape. The renminbi has become the second-largest trade financing currency globally; when calculated on a full-caliber basis, the renminbi has become the third-largest payment currency worldwide.

China's rapid economic development over the past 40 years has occurred within the framework of the global economy under the dollar system, where dollar hegemony is vividly reflected. China is striving to reduce the constraints of dollar hegemony on its development within the traditional system; meanwhile, stablecoins provide a new track where the vast quality assets, market credit, and national credit accumulated by China over the past 40 years can be manifested as China's competitive advantage in stablecoins.

China has the opportunity to weaken dollar hegemony in the development of stablecoins and to construct a new position for Chinese assets and the renminbi in the global economy. The key lies in determination and speed. The rules of the stablecoin game are being written in real-time, and every day of hesitation is an opportunity cost. It is not about opposing the dollar but redefining the rules of currency.

In this process, Hong Kong stands at the forefront of this transformation. Not only because it is an international financial center but also because it is a crossroads of East and West, a testing ground for new and old systems—connecting tradition and innovation, East and West, regulation and freedom. In the new world of stablecoins, this is the greatest advantage.

Hong Kong should promote the development of stablecoins with a broader vision, a higher stance, more open policies, and more efficient regulatory efficiency.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。