/Pogled.info/ The USA is no longer just living on credit – they are experimenting with the entire planet.
Trump’s “act of genius” turns the dollar into a hybrid between currency, derivative and casino token: stablecoins tied to the US currency threaten to flood the world with “quasi-dollars” that do not pass through the classic control of the Fed, but work in its favor. Amid a $38 trillion national debt, rising interest rates and falling confidence in US government securities, Washington is trying to buy time by turning the printing press over to banks and private players.
At best, this is a brief reprieve for the dying dollar empire, at worst, a trigger for a global meltdown in which the greenback loses its status as a world currency.
The so-called “Genius Act” (GENIUS Act) is a hot topic of discussion in the United States. This is the name of a US federal law passed in July 2025. GENIUS is an acronym; the full name of the law is the Guiding and Establishing National Innovation for US Stablecoins Act. In Russia, this law is most often called the “Genius Law“.
On July 18, Donald Trump signed two other laws alongside the aforementioned law: the Anti-CBDC Act and the Digital Asset Market Clarity Act of 2025. The first of these laws prohibits the development and use of digital currencies by central banks (primarily referring to the digital US dollar that was developed by the Federal Reserve during Joe Biden’s presidency). The second law aims to create a regulatory framework for digital assets.
All three laws are organically interconnected and complement each other. But of this trio, it is the “Genius Law” that is of greatest interest to experts. This is because the implications of its implementation are not entirely clear. Moreover, it is becoming increasingly clear that the “Genius Law” will require some additions and refinements. And it is not entirely clear in what direction the law will be amended.
Some commentators have directly argued that the “Genius Act” will lead to a real revolution in the US financial and monetary system. Almost on par with the creation of the US central bank, the Federal Reserve, in 1913. Under Joe Biden, this revolution was being prepared in the form of the release of a digital dollar by the US Federal Reserve.
If this plan is implemented, the Federal Reserve’s power over the monetary system and the entire US (which is already colossal) will increase dramatically. And private commercial banks (of which there are approximately four thousand) could disappear altogether.
Trump, even during the election campaign last year, said that the digital dollar is an encroachment on the freedom of American citizens and that he will not allow the release of CBDC (central bank digital currency) in the US. Trump followed through on his promise, first by signing an executive order halting work on the digital dollar, and then by supporting congressional legislation banning the development and use of CBDCs.
At the same time, Trump promised to strongly support private digital currencies (cryptocurrencies) during his election campaign, claiming that they would be the foundation of American democracy. There are some doubts about the sincerity of these claims, as Trump has previously expressed a very negative attitude towards cryptocurrencies. Trump’s support for private digital currencies was likely motivated by the fact that he received significant financial support from cryptocurrency businesses during his campaign.
Some experts call the “Genius Act” a “golden mean” between two extremes: a digital dollar and private digital currencies. They believe that the law can easily be called “genius”. The proposed instrument, called “stablecoins”, on the one hand relies on private initiative, while on the other, it directs the energy of private initiative to strengthen the official currency, the US dollar.
This is because all stablecoins must be pegged to the official dollar and backed by dollar assets. By the way, this is exactly how the “people’s representatives” on Capitol Hill argued for the legalization of stablecoins in the US.
A stablecoin, as the name suggests, is a digital currency with a stable exchange rate. Unlike traditional cryptocurrencies, which are highly volatile and therefore more like a gambling instrument than real money, stablecoins are most often pegged 1:1 to official currencies.
Their stability is ensured by assets held on the issuer’s balance sheet. These assets may include commodities (oil, grain, etc.), official currencies (bank accounts or securities denominated in such currencies), gold, and other precious metals. There are a large number of different stablecoins worldwide.
However, they currently occupy a relatively modest place in the private market of digital currencies. As of August 2025, the global market capitalization of stablecoins was approximately $280 billion, representing approximately 6.8% of the total cryptocurrency market.
It is noteworthy that two currencies currently dominate the world of stablecoins, both issued by American companies: USDT (issued by Tether ) and USDC (issued by Circle ). As of November 2025, USDT had a market cap of approximately $184 billion, while USDC had a market cap of $75-76 billion.
These two digital currencies are pegged 1:1 to the dollar. Issuing companies state that USDT and USDC are backed by US dollars, either in the form of currency held in bank accounts or in the form of US dollar-denominated securities (primarily government bonds). Other liquid assets, including precious metals, also provide some collateral.
Tether currently holds 116 tons of gold reserves. This is comparable to the gold reserves of the central banks of Korea, Greece and Hungary. The USDT stablecoin issuer is considered to be the largest private holder of the precious metal not only in the US but globally.
According to experts, USDT and USDC currently represent approximately 90% of the global stablecoin market capitalization. In short, America will not create stablecoins out of thin air. It seems that many US banks will be involved in issuing them.
Following the passage of the GENIUS Act, US Bank has already announced testing of its own stablecoin on the Stellar blockchain. In 2026, banks such as Citi, Goldman Sachs, Barclays and Bank of America are expected to start issuing stablecoins.
So why are some experts calling the “Act of Genius” a revolution in the US financial and monetary world? Because they believe that it will create a gigantic mass of new money, which, on the one hand, will supplement the money supply of official US dollars issued by the Federal Reserve, and on the other hand, will not create an additional burden on the monetary authorities of the USA (the Federal Reserve and the Treasury Department).
Some experts have begun calling such stablecoins “dollar derivatives,” “parallel dollars,” “quasi-dollars,” and “shadow dollars.” After World War II, when the Bretton Woods gold-dollar standard was in effect, it said: “A dollar is as good as gold.”
Now, as supporters of the “genius act” hope, they will say to themselves: “A stablecoin pegged to the dollar is as good as the dollar itself.” Just as during the gold-dollar standard there was free conversion of the dollar into gold and vice versa, so there will be free conversion of the US dollar into stablecoins and vice versa.
It is worth recalling that Federal Reserve Chairman Jerome Powell announced in October this year that the Federal Reserve’s quantitative easing policy was ending. He also hinted that there are signs that the US economy will enter a recession next year.
Therefore, the Federal Reserve will have to resort to “quantitative easing” – a policy that involves lowering the key interest rate and increasing the money supply. Everyone understands that quantitative easing is a very dangerous policy. And now, it seems, a magic wand has appeared in the form of dollar stablecoins. The Federal Reserve will not necessarily turn on the printing press and inflate its assets and liabilities, which have already increased over the past decade and a half.
Banks and private companies will be given the right to increase the money supply using their own small “printing presses” which will then produce dollar stablecoins.
And what will the dollar stablecoins be backed by? Real dollars held in commercial bank accounts and US Treasuries. Today, the appetite of both US and foreign investors for US Treasuries is beginning to wane.
It is worth noting that last year the share of US government securities in the total international reserves of all central banks fell below that of gold. Central banks began to favor the precious metal over US Treasuries and bills.
According to proponents of the Genius Act, dollar stablecoins should revive appetite for government securities. This should be seen not only by American commercial banks and companies, but also by foreign ones. The “Genius Act” does not prohibit non-residents from issuing dollar stablecoins. Barclays, a bank in the City of London, has announced its readiness to start issuing dollar stablecoins.
To do this, however, the British bank itself would likely have to buy US Treasuries. A recovery in demand for US Treasuries will lower interest rates on those securities.
This is of great interest to the 47th President of the United States, who is extremely concerned about the rising interest costs (the cost of servicing the national debt) in the US federal budget. These costs have already exceeded $1 trillion, exceeding US defense spending.
Today, the US national debt has reached $38 trillion. If dollar-denominated stablecoins gain momentum, some proponents of the “Genius Act” believe that issuers of the new currency will be able to buy back all of the U.S. government debt. Therefore, the amount of additional liquidity in the economy could increase by $38 trillion.
But if we consider that dollar stablecoins can also be backed by official dollars in bank accounts, the additional liquidity in the US economy could increase by over $50 trillion. Such “quantitative easing” is a pipe dream! This is the optimistic scenario of the proponents of the Law of Genius. Even the optimists don’t know how long this dollar stablecoin euphoria can last.
But this scenario also has an end, which will occur when the dollar support is completely exhausted. Finally, the monetary authorities will once again be unable to meet their “legal” obligations. Therefore, bankruptcy will occur with all the resulting consequences for the US state and the US dollar. So the “act of genius” is simply a postponement of America’s bankruptcy.
But even the optimists acknowledge that there could be many stumbling blocks to implementing the Genius Act plan. Many are confident that dollar-denominated stablecoins will be able to pay for America’s imports (which total $4.1 trillion in 2024).
However, it is far from certain that governments in other countries will allow this payment method. They may not, as these are second-tier obligations (obligations of the issuer of the digital currency backed by obligations of the US Treasury). This tool looks too virtual.
Optimists hope that some stumbling blocks can be removed by passing various amendments to the Genius Act. For example, dollar-denominated stablecoins do not currently have the status of money under US law. They are simply digital assets or digital tokens.
To comply with current law, US banks will have to report all transactions involving dollar-denominated stablecoins as off-balance sheet transactions. Here is what Russian experts say about the legal inadequacy of the new currency:
„The Genius Act “recognized stablecoins issued by US banks, in accordance with licenses obtained for that purpose, as legal tender and nothing more. This is interesting because stablecoins were only allowed to perform one function of money – settlement. Although stablecoins by definition are not full money, they are not even officially equated to the dollar in this capacity by this law.”
Therefore, it would make sense for banks not to reflect issued stablecoins on their balance sheets, but instead to place them in off-balance sheet accounts. Stablecoin loans would also be reflected there. While in US currency everything appears to remain unchanged, surrogate lending volumes would increase sharply, creating a sort of off-balance sheet black hole.
It follows from the above that the “people’s representatives” in the US Congress must come up with something to ensure that dollar-denominated stablecoins are given full currency status. But so far they haven’t been able to come up with anything.
The various obstacles and risks associated with the implementation of the dollar stablecoin plan are endlessly debated. One of the most frequently mentioned risks is the threat of accelerated inflation. A sharp increase in the money supply due to quasi-dollars (stablecoins) will inevitably lead to higher prices for everything.
In turn, this will lead to a depreciation of the official US dollar. And at some point, “quantity will become quality”: the US dollar will lose its status as a global currency, with all the resulting consequences for America and the rest of the world.
So, an “act of genius” will not save America. The only moot point is when the US dollar will collapse. The “act of genius” should be seen as a trigger that initiates the transition of the global financial system to some new state.
Translation: EU
