Recently, a major focus on Wall Street has been the official enactment of a stablecoin-related bill, seen as a move to expand the U.S. dollar’s global role into the digital realm. The Economist described the cryptocurrency boom as something that will fundamentally reshape the financial industry.
From the Bretton Woods system, where the dollar was pegged to gold, to the petrodollar system in the Middle East, the dominance of the U.S. dollar has already gone through two major versions. Now, driven by the rise of AI and blockchain technologies, a new global “currency war” is quietly emerging under the banner of a digital currency revolution.
On July 17, the same day the U.S. House of Representatives passed the Lummis-Gillibrand Payment Stablecoin Act (nicknamed the “GENIUS Act”), blockchain analytics firm Chainalysis reported that as of mid-July, $2.17 billion worth of crypto had been stolen from various platforms in 2025—already surpassing the $1.87 billion stolen in all of 2024. That figure is expected to hit $4 billion by the end of 2025.
Media outlets have noted that this surge in crypto-related crime coincides with the Trump administration’s increasingly permissive stance on digital assets. The lack of regulation in U.S.-based crypto exchanges and the unchecked proliferation of digital currencies are raising serious alarms for global financial security.
From Crackdown to Cheerleader: Why U.S. Authorities Flipped on Crypto
It’s worth noting that just a few years ago, Donald Trump was a vocal crypto skeptic. He once called Bitcoin a scam driven by the “foolishness” of people like Elon Musk, and saw it as a “currency competing with the dollar.”
So, what triggered Trump’s dramatic change of heart? According to NBC, the answer lies in the lead-up to the 2024 U.S. presidential election.
In May 2024, during an event at Mar-a-Lago, Trump reportedly received a pledge of major financial support from a heavyweight in the crypto world. That key backer was none other than Peter Thiel—the founder of PayPal and a legendary Silicon Valley venture capitalist.
Thiel also introduced Trump to a rising political figure with deep roots in the crypto space: J.D. Vance, a former employee at Thiel’s crypto-focused investment firm, Mithril Capital. Vance would go on to become Trump’s running mate and is now the Vice President of the United States.
Public Broadcasting Service (PBS) described this as a “political marriage of convenience” between Trump and the crypto industry.
According to The Washington Post, nearly 70 officials appointed or nominated by the Trump administration hold cryptocurrency assets or have invested in crypto-related companies, with holdings ranging from modest amounts to over $120 million. Meanwhile, Fortune magazine reports that “American Bitcoin Corp.” — a firm launched on March 31 with Trump family involvement — has already raised $220 million and is planning to go public.
Is “Tokenized” Dollar the Lifeline for U.S. Debt?
Latest data shows the global stablecoin market has surpassed $260 billion—95% of which is dollar-backed. One of the primary destinations for stablecoin reserves? U.S. Treasury bonds.
Currently, the U.S. has over $36 trillion in outstanding debt. Amid years of fiscal deficits, all three major credit rating agencies—S&P, Fitch, and Moody’s—have downgraded U.S. creditworthiness. As confidence in Treasuries declines, so does demand.
The U.S. government envisions a workaround: as the stablecoin market expands (potentially to $3.7 trillion by 2030), issuers of stablecoins could become major holders of U.S. debt.
This would create a new “on-chain debt cycle”: the U.S. Treasury issues bonds, stablecoin companies buy them with dollars, users receive stablecoins, and the Treasury gets hard cash. In effect, global stablecoin users become the end buyers of U.S. debt.
Analysts warn that while the U.S. is trying to “tokenize” the dollar to preserve monetary dominance, criminals are exploiting techniques like “chain peeling”—a process of laundering illicit crypto through a long trail of small, unlinkable transactions—making global financial oversight increasingly difficult.
From gold-backed dollars under Bretton Woods to petrodollars tied to Middle Eastern oil, dollar hegemony has evolved through two major eras. Now, amid rising calls for global de-dollarization and weakening trust in U.S. debt, digital currency governance is under sharper international scrutiny.
At the same time, the U.S. stablecoin push is quietly fueling a new kind of “currency war,” cracking open the door to monetary system reform. In an age of decentralized, peer-to-peer payments—and with nations racing to put their sovereign currencies “on-chain”—building a fairer and more stable international financial order has become a pressing new challenge.
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