【Epoch Times, October 11, 2025】Ten years ago, “Stablecoin” was just a concept of blockchain technology. Today, this concept is being redefined in the United States under the Trump administration, with Stablecoin emerging as a new geopolitical financial tool whose influence may surpass that of cryptocurrencies themselves. The development of Stablecoin has raised deep concerns for the Chinese Communist Party.
Generally speaking, cryptocurrencies like Bitcoin or Ether experience volatile price fluctuations, making them unsuitable as payment tools. In recent years, there has been a push to reduce price volatility, leading to the introduction of the new virtual asset, “Stablecoin.”
Stablecoin is a new type of cryptocurrency designed to maintain a stable value, providing a more reliable store of value and medium of exchange for the cryptocurrency market.
Since World War II, the United States has long played the role of “global security asset provider” by issuing national debt and exporting the US dollar, maintaining the international financial order.
However, this model has had some consequences for the United States. Foreign central banks holding large amounts of US debt have driven up the value of the dollar, making the US manufacturing sector less competitive in international trade.
According to Bloomberg, current Federal Reserve Board member and former economic advisor to the Trump administration, Stephen Miran, pointed out in a paper last year that “from a trade perspective, the US dollar is long overvalued because US assets are global reserve currencies. This overvaluation has crushed the US manufacturing sector while benefiting the financial sector.”
This analysis has also become the theoretical basis for the Trump team’s push for digitalization reform of the US dollar.
The recently passed “Genius Act” in the United States laid out a clear regulatory framework for US dollar Stablecoin. According to the regulations, issuers must be backed by bank deposits, short-term Treasury bonds, and repo agreements collateralized with government debt.
Stablecoins are prohibited from paying interest, indicating they are intentionally designed as pure payment tools without savings appeal. As long as Stablecoins can be pegged 1:1 to the US dollar, they can spread globally as a stable payment tool.
For countries grappling with high inflation, capital controls, or political instability, Stablecoin has become a new means for cross-border remittances and fund hedging.
The average global remittance fee currently stands at around 6.5%. The widespread adoption of Stablecoin is expected to significantly reduce costs, allowing the US dollar to not only circulate through central banks and banking systems but also directly enter the daily economic activities of individuals and businesses globally.
For Beijing, this represents a wave of digital currency dollarization. While China actively promotes the internationalization of the renminbi and cross-border payments, US Stablecoin may potentially bypass traditional banking systems and spread to China’s surrounding areas and emerging markets through blockchain technology.
Take Pakistan, a key country in the Belt and Road Initiative, for example. Since 2021, the local currency, the rupee, has devalued by nearly half against the US dollar.
Following the 24th IMF bailout, the rupee stabilized temporarily, but significant devaluation and high inflation persist, leaving public confidence in the economy weak.
Pakistan has now been included in the global cryptocurrency initiative by the Trump administration. For local residents, holding “digital dollars” as a store of value and remittance option may be preferable to depositing money in unstable banks.
Standard Chartered Bank estimates that Stablecoin may attract as much as $1 trillion in deposits from emerging market banks in the coming years.
This trend has raised concerns for Beijing authorities. While Beijing strives to promote the internationalization of the renminbi, US Stablecoin may trigger a new wave of dollarization.
China’s digital currency (e-CNY) has limited domestic application and lacks market momentum. Due to the Chinese government’s ban on crypto transactions, Beijing may consider allowing private institutions to experiment with “offshore renminbi Stablecoin” as a means to advance the internationalization of the renminbi.
Erica Tay, Head of Macro Research at Malaya Bank, points out that Stablecoins supported by the renminbi face challenges in international success. As the renminbi’s share of global payments remains at about 4%, significantly behind the US dollar. According to data from the Bank for International Settlements, over 99% of Stablecoins are currently denominated in US dollars.
Although this may appear to weaken the traditional US dollar system, experts believe it could actually lead to a digital rebirth of dollar hegemony.
Jean-Pierre Landau, former Deputy Governor of the Bank of France, indicates that the strength of US Stablecoin comes from the “network effect” rather than the “reserve status.”
In other words, every user of Stablecoin strengthens the US dollar system itself. As the user base grows, the issuer needs to purchase more US dollars or US government debt to support the token, creating a new financing cycle.
This allows the US to continue attracting global funds without expanding external debt burdens, and through private digital financial networks, grasp control of the world economy.
The latest report from JPMorgan Chase also suggests that while there are significant differences in market estimates for future demand for Stablecoins, global adoption of Stablecoin may attract trillions of dollars into the US dollar in the coming years, potentially consolidating rather than weakening the US dollar’s position.
US Treasury Secretary Scott Bessent has explicitly stated that Stablecoin helps strengthen the US dollar’s dominance in the global monetary system. He believes that global users are more inclined to choose Stablecoins supported by the US, rather than digital currencies from European or Chinese central banks, as investors view private sectors regulated under the US as more trustworthy.
(This article references reporting from Bloomberg).