Chainfeeds Briefing:
From certain policy perspectives, "Tether's interests suddenly align with U.S. interests".
Article Source:
https://mp.weixin.qq.com/s/hgEkSVolEMR-4AhY8do2aQ
Article Author:
Cobo
Perspective:
Cobo: The advancement of the 'GENIUS Act' not only marks the acceleration of the U.S. stablecoin regulatory framework but is also seen as the substantive beginning of a "digital dollar" extension strategy. As the global financial landscape is rapidly reshaping, the United States is incorporating stablecoins into the regulatory system through legislative means, with the purpose not merely being to prevent financial risks, but to attempt to structurally consolidate dollar hegemony. According to the bill's provisions, all compliant stablecoin issuers must use 100% U.S. dollar cash or short-term U.S. Treasury bonds as reserves, and regularly disclose transparency reports. This means that for every $1 of stablecoin issued, a corresponding U.S. dollar asset will be simultaneously locked, generating continuous demand for U.S. Treasury bonds. Standard Chartered Bank predicts that the market value of dollar stablecoins will reach $2 trillion by 2028, while Citibank estimates the market size could reach up to $3.7 trillion by 2030. The asset-liability structure of stablecoins perfectly nests into the U.S. Treasury bond market, forming a global digital currency system "denominated in dollars and backed by U.S. Treasury bonds". This bidirectional design using legislation not only creates a new type of structural buyer in the financial market but also enhances the digital extension capability of the U.S. dollar as a world reserve currency. Tether (USDT), as the stablecoin with the largest global circulation, is becoming increasingly impossible to ignore in the U.S. Treasury bond market. Data shows that the total U.S. Treasury bonds held by Tether can now match those of major countries like Germany. Its deep cooperation with Cantor Fitzgerald (a Federal Reserve primary dealer) provides it with high-level fund scheduling capabilities in addressing market liquidity crises. During the market turbulence in 2022, Tether completed a concentrated redemption of up to $7 billion within 48 hours, accounting for 10% of its total market value at the time, without triggering systemic risks. This liquidity arrangement demonstrates its unique market resilience and proves the "buffer" value of stablecoins to the dollar system at critical moments. Tether's status has transformed from a crypto industry infrastructure to a new structural participant in the U.S. Treasury bond system. More importantly, its active expansion in regions like Africa and Latin America not only represents a global commercial layout but also somewhat promotes the "soft projection" of the U.S. dollar in the digital world. This makes Tether no longer just a cryptocurrency issuer, but an extension node of U.S. dollar influence in the digital era. The global expansion path of stablecoins is highly coupled with U.S. national strategy. The 'GENIUS Act' establishes a regulatory foundation for stablecoins through legislation, while market forces like Tether become effective carriers of this strategy. Meanwhile, new entrants like PayPal and World Liberty Financial are also trying to get a share of the stablecoin market. Treasury Secretary Bessent anticipates that digital assets will bring $2 trillion of new demand to the U.S. Treasury bond market in the coming years, which may alleviate the pressure from traditional sovereign nations (such as China and Japan) reducing U.S. bond holdings. From a national perspective, the United States is no longer directly promoting central bank digital currencies (CBDC), but instead leveraging private stablecoin issuers to export digital dollars at a lower cost, capturing payment, reserve, and liquidity scenarios globally. This model guided by regulation and driven by the market is essentially a digital reconstruction of monetary hegemony. However, this "open strategy" also comes with risks: in the event of a large-scale redemption wave, stablecoin issuers would need to quickly liquidate their Treasury bond reserves, potentially impacting the U.S. Treasury bond market. Additionally, regulatory coordination, compliance transparency, technological security, and geopolitical variables will all influence the success of this path. Nevertheless, this strategy remains a key step for the United States in reshaping the global financial order in the digital age.
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