With the passage of the GENIUS Act, the United States has demonstrated its commitment to building a stablecoin-based economy. Through this initiative, the country aims to consolidate the global dominance of the dollar. However, Yanis Varoufakis sees this as a recipe for disaster.
In an exclusive interview with BeInCrypto, the Greek economist and former finance minister warned that the law could lead to a financial crisis worse than 2008. In this context, he argued that China’s controlled and disciplined approach to economic power has a better chance of winning.
Washington's stablecoin power strategy
Since the end of the Bretton Woods era, the United States has maintained global dominance largely through financial power and the dominance of the dollar.
But that dominance, once supported by a strong industrial base, has changed as America’s manufacturing prowess has declined. Today, Washington’s influence is instead based on two pillars: Silicon Valley’s control of Big Tech and the dollar’s control of international payments .
The ability to route most global transactions through the US financial system gives Washington enormous leverage. It allows it to impose sanctions, finance its deficit cheaply and maintain its geopolitical influence.
“If you want to send money from anywhere to anywhere, you have to go through the dollar system… That's why [the US] uses sanctions as a weapon against anyone they don't like, good or bad,” Varoufakis told BeInCrypto, adding, “It's the dollar hegemony that makes America not great, but strong. And they know that if they lose that, they collapse.”
Now, in an effort to cement the dollar's dominance, the United States is turning to stablecoins .
A new strategy to control the dollar
In November 2024, US economist Stephen Miran—a close Trump ally and current member of the Federal Reserve Board—introduced an economic framework known as the Mar-a-Lago Accord.
The core of the plan is a controlled depreciation of the dollar to reduce the trade deficit and revive US manufacturing, while maintaining the currency's Vai as the world's reserve standard.
“On the one hand, [Miran] wants to reduce the exchange value of the dollar. On the other hand, he wants to keep the dollar as the main payment system in the world,” Varoufakis explained.
The GENIUS Act fits neatly into this vision. By supporting a regulated stablecoin economy, it expands the dominance of the dollar , reinforcing American monetary power through crypto-based infrastructure rather than traditional banking.
However, according to Varoufakis, this approach is short-term and dangerous.
When Stablecoins Become a Systemic Threat
By allowing banks and private issuers to build and pilot stablecoin economies, Varoufakis warns that this reinforces the very dynamic that has long defined the American system – a government dominated by Wall Street.
“We know that the Federal Reserve is not an independent central bank. It is independent of the American people and Congress, but it is completely dependent on JPMorgan and Goldman Sachs… Its Vai is to do a little regulation, but nothing that would bother Wall Street too much,” Varoufakis explained.
He argues that the deep privatization of economic power is a recipe for systemic fragility.
If a major stablecoin collapses due to mismanagement, speculation or a crisis of confidence, the effects will ripple across borders. Foreign economies using dollar-backed Token will have no recourse, as they cannot print dollars to stave off panic.
“As we speak, there are Malaysian companies, Indonesian companies, and companies in Europe that are increasingly using Tether… this is a big problem. Suddenly, these countries… end up with central banks that don’t control their money supply. So their ability to execute monetary policy is reduced and that introduces instability,” Varoufakis added.
Such a failure could unleash a chain reaction similar to the Great Depression. Varoufakis warns that this would become a self-inflicted global crisis – fueled by America’s efforts to digitize and alienate its financial empire to the institutions that brought it to the brink of collapse.
“Like in 2007-8, when the whole thing collapsed, there will be second and third generation effects that will negatively impact the US. So I think this will be the next financial crisis that comes from the stablecoin market.”
China, by contrast, has built a state-coordinated financial and technological ecosystem designed to prevent such instability.
China's controlled capitalism works
While the US government must answer to Wall Street, Chinese bankers and tech leaders answer to the state, according to Varoufakis. Private companies can make profits, but they operate within strict government-imposed limits.
“You can call this authoritarianism, I call it prudence,” he said.
Varoufakis described China’s remarkable integration of big tech and finance. Platforms like WeChat Pay and the digital yuan have established a unified and efficient payments network under state supervision.
In contrast, the US will not easily copy this model, because Wall Street stands firmly in the way. Integrating digital payments with credit and banking will weaken their control over the financial system.
“You may remember that Mark Zuckerberg tried to introduce his own Facebook cryptocurrency and he was held back by Wall Street with help from the Fed,” Varoufakis explained.
He further emphasizes this difference by arguing that the US has advanced technology but no clear direction, allowing private monopolies to take over. As a result, it remains technologically strong but politically stagnant, unable to modernize or build efficiently.
“For me, the Chinese did it right, and the Americans did it incredibly wrong… I believe that if Adam Smith were alive today, the master of free-market capitalism, he would agree with what I am saying. He would be amazed at what is happening in Washington and New York,” Varoufakis stressed.
In his view, this difference will shape the coming global economic struggle —and ultimately determine which system will survive.
