Imagine sending money across borders in seconds, with the trust of a government bond backing every transaction. That’s the vision behind the US’s new GENIUS Act, a technology-driven shakeup aiming to restore the dollar’s global dominance by legalizing stablecoins backed by US Treasury bonds.
Proponents hail this move as a leap forward for digital finance. By turning public debt into private money, the GENIUS Act promises faster, cheaper global payments. But critics warn it comes with hidden risks: an underregulated ecosystem, minimal public accountability and a web of private players controlling trillions in dollar-based assets.
Foreign holders of US Treasuries—central banks, sovereign funds and institutional investors—now face exposure to a hyper-financialized dollar network. If a major stablecoin issuer stumbles, the shockwaves could spread far beyond US shores, triggering a cascade of sell-offs and liquidity squeezes worldwide.
Rather than deepening reliance on the dollar, many experts argue non-US economies should see this as a wake-up call. Accelerating dedollarization—diversifying reserves, strengthening local currencies and building resilient payment systems—may be the best defense against potential contagion.
The GENIUS Act may look like a genius upgrade for digital money, but without robust guardrails and public oversight, it risks being remembered as a global financial folly.
Reference(s):
cgtn.com
