The role of stablecoins is undergoing subtle yet profound changes. If you still see them simply as a payment tool in the crypto space, recent policy developments might reshape your understanding.

In July 2025, the enactment of the "Genius Act" marked the beginning of a new phase. The bill imposes strict constraints on stablecoins: issuers must back 100% of their stablecoins with USD cash or U.S. Treasuries, and other forms of collateral are completely prohibited. At the same time, the bill directly halts the Federal Reserve's plans to issue CBDCs, effectively reserving the issuance of USD stablecoins for the private sector.

What appears to be strict regulation actually opens another door. Every time the scale of stablecoins increases by $100 billion, it corresponds to a $100 billion demand for U.S. Treasuries. This mathematical relationship seems simple, but its chain reactions are worth pondering.

The total U.S. national debt has already reached $38 trillion, with an increase of $1 trillion every hundred days becoming the norm. Under such fiscal pressure, the expansion of stablecoins becomes an ideal solution—funds from global crypto users flow into stablecoins, issuers use these funds to buy Treasuries, the U.S. government secures financing, economic growth further pushes up asset prices, and more users flood into the crypto market to buy stablecoins. This cycle reinforces itself, accelerating over time.

From another perspective, capital flowing into crypto trading worldwide is being gently but firmly directed toward the U.S. Treasury market. Users pursue trading convenience and asset preservation, often unaware that in the process, the entire ecosystem is contributing to U.S. debt financing. From a technical standpoint, stablecoins are innovative products; from a macro perspective, they have become a new weapon for dollar dominance in the blockchain era.

The brilliance of this design lies in its multiple benefits—stablecoin users gain liquidity, exchanges gain assets, U.S. Treasuries gain continuous buyers, and the U.S. benefits from low-cost financing. Each party benefits, making the entire system appear natural and reasonable. But in the long run, when this dependency deepens enough, any turbulence in the stablecoin market could trigger changes in global liquidity.

The current crypto market continues to grow rapidly, with demand for stablecoins as trading pairs and stores of value steadily increasing. However, understanding the financial logic behind this is a necessary lesson for all participants.