By passing the GENIUS Act, the United States expressed its commitment to building a stablecoin-based economy. Through this initiative, we seek to strengthen the dollar’s global dominance. But Yiannis Varoufakis sees this as a recipe for disaster.
Greek economist and former Finance Minister Yanis Varoufakis warned in an exclusive interview with BeInCrypto that the bill could trigger a financial crisis worse than the one in 2008. In this regard, he argues that China’s state-oriented and more systematic economic power will be more dominant.
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Washington Stablecoin Strategy
Table of Contents
Since the Bretton Woods era, the United States has maintained global dominance primarily through financial power and dominance of the dollar.
But this dominance, supported by a strong industrial base, developed as America’s manufacturing capacity declined. Currently, Washington’s influence rests on two pillars: Silicon Valley’s dominance of Big Tech and the dollar’s control of international payments.
The ability to process most global transactions through the U.S. financial system gives Washington enormous leverage. This allows them to impose sanctions, finance deficits at low costs, and maintain geopolitical influence.
“If you want to send money from somewhere, it has to go through the dollar system. That’s why [미국은] Sanctions are being used as a weapon against people they don’t like, for better or for worse,” Varoufakis told BeInCrypto, adding that “America is not great, but it is strong because of the hegemony of the dollar. “If they lose this, they are finished,” he added.
Now, in an effort to strengthen the dollar’s dominance, the United States is turning to stablecoins.
new dollar control strategy
In November 2024, Stephen Miran, a close Trump ally, joined the Federal Reserve and introduced an economic framework called the Mar-a-Lago Accord.
The essence of the plan was to maintain the currency’s role as a global benchmark while devaluing the dollar in a controlled manner to reduce the trade deficit and revive American manufacturing.
“On the one hand, [미란] It seeks to reduce the exchange value of the silver dollar. On the other hand, he wants to maintain the dollar as the world’s main payment system,” Varoufakis explained.
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The GENIUS Act is well aligned with this vision. By supporting a regulated stablecoin economy, it strengthens America’s monetary power over traditional banks through crypto-based infrastructure. It is known.
But according to Varoufakis, this approach is dangerously short-term.
When stablecoins become a systemic risk
By allowing banks and private issuers to build and experiment with stablecoin economies, Varoufakis warned that this reinforces the dynamics that have long defined the U.S. system. This means the government will be controlled 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 completely dependent on JPMorgan and Goldman Sachs. Its role is to regulate a little bit, but not to bother Wall Street too much,” Varoufakis explained.
He argued that the deepening privatization of economic power would lead to systemic vulnerabilities.
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If a major stablecoin were to collapse due to mismanagement, speculation, or a crisis of trust, the impact would transcend borders. Foreign economies using dollar-backed tokens would have no relief because they would not be able to issue dollars to prevent a panic.
“As we speak, more and more Malaysian companies, Indonesian companies, European companies are using Tether. This is a big problem. Suddenly, these countries get central banks that don’t control the money supply. So their ability to conduct monetary policy is reduced, and that creates instability,” Varoufakis added.
Such a failure could trigger a chain reaction reminiscent of the Great Recession. Varoufakis warned that this would lead to a self-imposed global crisis, and that America’s efforts to digitize and outsource its financial empire would place blame on the very institutions that once brought it to the brink of collapse.
“Just like in 2007-8, if everything goes wrong, the resulting second and third generation effects will have negative consequences for the United States. So I see this as the next financial crisis starting with the market for stablecoins.” – Yanis Varoufakis, former Minister of Finance
By contrast, China has built a state-led financial and technology ecosystem designed to prevent such instability.
Chinese Controlled Capitalism Performance
While the U.S. government answers to Wall Street, China’s banking and technology leaders answer to the state, Varoufakis explained. Private enterprises can make profits, but they operate within strict state limits.
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“You can call it authoritarianism, but I call it prudent action,” he said.
Varoufakis described China’s integration of big tech and finance as noteworthy. Platforms such as WeChat Pay and Digital Yuan have established a unified and efficient payment network under state supervision.
The United States, on the other hand, cannot easily replicate this model with Wall Street holding firm. Integrating digital payments with credit and banking will weaken Wall Street’s control over the financial system.
“You probably remember that Mark Zuckerberg tried to launch his own Facebook cryptocurrency a while ago and was suppressed by Wall Street with help from the Federal Reserve.” – Varoufakis’ explanation.
He emphasized this point, arguing that although the United States has advanced technology, it lacks a clear direction and is dominated by private monopolies. As a result, the United States is technologically strong but politically blocked and unable to modernize or build effectively.
“In my view, China is right, and America is… extremely wrong… If Adam Smith, the guru of free-market capitalism, were alive today, he would agree with me. He would be appalled by what is happening in Washington and New York.” – Varoufakis’ emphasis.
In his view, these differences will define the coming global economic power struggle and ultimately determine which system will survive.
