This piece is dedicated to those still running naked in the investment market and relying on outdated financial concepts and perspectives to make their trades.

The whole world is anxious about where the dollar is headed next, and whether U.S. treasuries can hold up. If they continue with the old playbook, like rolling over debt and constantly raising the debt ceiling, they might get through this year. But is that sustainable for the next five, ten, or even fifty years? They really need to weigh that carefully.

In recent months, the U.S. has been scheming a brand new framework. This is all to better support its dollar and the upcoming issuance of treasury bonds. Let's dive into this together; the content might be a bit forward-looking, but it ties in with a series of current events that we can discuss further.

In April 2025, Congress is advancing the stablecoin legislation, which mainly includes two parts: the Senate's Genius and the House's Stable Act. On April 23, 2025, this Genius passed the Senate Banking Committee. Let's take a closer look at this Genius; its main goal is to establish a federal regulatory framework for stablecoins. Here, let me give you a bit of basic knowledge:
We often hear about cryptocurrencies, which are decentralized digital currencies, like the well-known Bitcoin and Ethereum. Their characteristic is high volatility. Stablecoins, on the other hand, can be seen as a subset of cryptocurrencies that are pegged to stable-value currencies, such as the dollar, gold, or a basket of assets. Their main feature is reducing the high volatility of cryptocurrencies, making them suitable for transactions and payments. USDT and USDC, which are pegged to the dollar, maintain a 1:1 stability.

Having understood stablecoins, let’s return to this legislation and examine its main content. First, it clearly defines that stablecoins must be pegged to stable-value currencies, like we mentioned before, the dollar, gold, etc., and will establish clear licensing procedures for advancement.
Secondly, issuers of stablecoins are required to ensure that their reserves can be in cash or equivalent assets.

Third, it clearly states that issuers with large-scale issuance over $10 billion will be federally regulated, while those under this threshold can be state-regulated.
Now that we've laid out the relevant background, let’s take a look at the implications of this situation.

First off, it enhances the legitimacy of stablecoins in the crypto space, attracting more investment in the future.

Secondly, by clarifying the reserve requirements for issuers, it effectively protects consumers and reduces the risk of de-pegging. For instance, there was a brief de-pegging of USDC in 2023.

Thirdly, large-scale issuers will face stricter regulations, similar to banks, allowing stablecoins to integrate more closely into the financial system in the future.

Fourth, since most stablecoins are currently pegged to the dollar, this helps enhance the dollar's global dominance.
Fifth, due to the lower volatility and transaction costs of stablecoins, their potential in cross-border payments will be further unleashed in the future.

At this point, I hope everyone is starting to get a grasp of things. Let’s dig deeper. Earlier, we mentioned that issuers of stablecoins need to hold reserve assets. As we've noted, USDT and USDC are already holding a massive amount of U.S. Treasuries worth hundreds of billions. So, this should make sense now. The next step is to push stablecoins forward, strengthening their link to U.S. Treasuries, which will enhance the demand for them.
Currently, 75% of U.S. Treasury purchases come from domestic sources like American pension funds and the Federal Reserve, while around 20% is mainly bought by foreign central banks. If the stablecoin legislation passes smoothly, it means ordinary folks can buy U.S. Treasuries through stablecoins in the future. In other words, by utilizing decentralized digital currencies for transactions and payments, we can get more people supporting U.S. Treasuries. If this path opens up, it means the dollar will have better backing since these stablecoins are primarily pegged to the dollar.
Because the dollar and U.S. Treasuries are still highly regarded, if they accelerate the stablecoin legislation now and it progresses smoothly in the future, it could mean a shift towards alternatives for other sovereign currencies. During this process, the legislation requires issuers to disclose their asset reserves monthly, including the total circulating stablecoins and reserve amounts, thereby enhancing global transparency.

Lastly, let me add this: the world is currently experiencing a monetary war that is comparable to the two world wars, and a new financial and energy order is being reshaped. We are all witnesses to another significant turning point in human history. I'll be releasing a few more articles to continue analyzing: the Dollar System 2.0.