Digital Mercenaries: How Cryptocurrency is Rewiring the Global Financial Order

Introduction: WLF, Trump, and the Rise of Crypto Diplomacy

In the shadow of traditional geopolitics, a silent financial revolution is taking place one led not just by central banks, but by crypto-backed diplomacy and private capital with political cover. At the heart of this transformation is World Liberty Financial (WLF), a digital asset platform that has quietly emerged as a centre piece of the Trump family's post-2024 financial strategy. WLF’s flagship cryptocurrency, USD1, is a stablecoin backed by U.S. Treasuries, pitched as a secure, dollar-pegged alternative to China's eCNY.

According to investigative reports and political disclosures, the Trump family holds a controlling stake in WLF reportedly 60% while WLF’s co-founders, including Zach Witkoff (son of Trump's Middle East envoy Steven Witkoff), are playing the role of crypto envoys. Donald Trump’s foray into cryptocurrency through World Liberty Financial (WLF) marks a bold convergence of political ambition, digital finance, and strategic diplomacy. Founded in 2024, WLF is majority-owned by the Trump family via DT Marks DEFI LLC, giving them 60% equity and 75% of the revenue share. With Donald Trump as the public face & Eric Trump, Trump Jr on the board, WLF serves as both a financial engine and a geopolitical tool. Its flagship products are the WLFI governance token & the USD1 stablecoin pegged to the U.S. dollar designed to function both within institutional markets and consumer-facing blockchain ecosystems.

The company has already struck multi-billion dollar deals in the UAE, and more controversially, in Pakistan, where it is being used to facilitate crypto-enabled rare earths investments and strategic mineral contracts all under diplomatic umbrellas. Pakistan, seeking an economic lifeline and a way to circumvent international banking sanctions and FATF scrutiny, has welcomed the USD1 coin and WLF ventures as an alternate gateway to global capital. The collaboration could allow the Pakistani military and political elite to engage in covert financial flows, drug trade, and geopolitical manoeuvring outside the radar of SWIFT, IMF, and even their own national banking regulators. What emerges is a new global game where U.S. Treasuries, stablecoins, and geopolitics intersect, creating an ecosystem with powerful implications for finance, national security, and global alignment.

1. Diluting China and Japan’s Sovereign Debt Leverage

One of the long-standing risks to U.S. economic security is its dependence on foreign creditors, especially China and Japan, who collectively hold over $2 trillion in U.S. Treasury debt. In a crisis, Beijing or Tokyo could theoretically dump Treasuries to destabilize the dollar or influence U.S. foreign policy. Stablecoins like USD1 offer a new escape hatch. Because they are backed by short-term U.S. Treasuries amid others assets held in custodial accounts, each minted USD1 token represents private sector demand for U.S. government debt. As this model scales especially if banks and institutions tokenize billions in assets the ownership of U.S. debt shifts from foreign governments to domestic or allied private actors, diluting geopolitical vulnerability. This strategy represents a reverse weaponization of dollar debt instead of fearing creditor retaliation, the U.S. converts Treasuries into decentralized, politically aligned instruments. Over the years, if $1 trillion or more in private UST-backed stablecoins circulate globally, the share held by adversaries like China will diminish, giving Washington a stronger hand.

2. Cooling Yields and Reinforcing Dollar Demand

With the U.S. facing $7 trillion in debt rollovers in the coming months, Treasury yields are surging, and bond market volatility is rising. At the same time, there is a global dollar shortage driven by deglobalization, war spending, and sanctions-induced fragmentation. Stablecoins offer a unique solution they convert global crypto demand into Treasury purchases, creating new buyer classes without relying on central banks. Though it must be emphasised this is a long-term solution to diversify US treasury poll and increase the demand of US debt specially in private sector through these stablecoin crypto launches.

Banks like JPMorgan (JPM Coin), Circle (USDC), and now politically connected ventures like WLF (USD1) are racing to offer digitally accessible, yield-generating stablecoins. Each dollar of crypto liquidity becomes a claim on Treasuries, thereby supporting UST demand, keeping yields stable, and preserving the dollar’s dominance without direct intervention by the Fed. The 5th largest buyer of US Treasury bonds in the world is Tether. US realizes that if it can make stablecoins bigger, it can funnel trillions into Treasuries ranging from $300B to $2 trillion as private crypto goes mainstream. That is why JP Morgan, Citibank, Bank of America, Wells Fargo are all introducing stablecoins. Even TRUMP launched one called USD1.

This trend is part of a broader effort to privatize monetary support for the Treasury market. Instead of quantitative easing, the U.S. is deploying a tokenization strategy to allow crypto platforms and their users to indirectly absorb sovereign debt. This also draws in crypto-native investors, especially from emerging markets, who previously stayed outside the dollar system.

3. Creating a Parallel Financial Infrastructure Beyond SWIFT and the Fed

Perhaps the most transformative element is that stablecoins like USD1 do not rely on the SWIFT network, the Federal Reserve, or even traditional correspondent banks. These tokens enable global transactions in dollars, but via peer-to-peer crypto wallets over blockchain network, smart contracts, and digital custody providers. This creates a shadow financial system that is at once politically curated, privately managed, and globally mobile. WLF, for instance, is marketing USD1 not just to financial institutions, but to governments and sovereign wealth funds especially those under U.S. diplomatic influence or under sanctions. In practice, Washington can offer digital liquidity without needing Fed approval or congressional appropriations. This is the future of “diplomatic crypto settlements” backroom deals, defence procurements, and rare earth contracts all settled via Treasury-backed crypto tokens that avoid bank reporting obligations, wire transfer logs, and traditional capital controls. It is monetary diplomacy, this is a far cry from the Bretton Woods order.

4. Enabling Rogue States and Covert Intelligence Operations

What makes USD1 (and similar tokens) uniquely dangerous is their opacity and political elasticity. In theory, any dollar-based transaction would fall under FATF, OFAC, and IMF surveillance. But USD1 is not issued by the U.S. Treasury or the Fed, but by WLF a politically connected private entity. This allows stablecoins to act as off-the-books cash equivalents, useful for actors that cannot legally access dollars. Which elevates this venture from a mere crypto business to a geopolitical flashpoint is WLF’s April 2025 partnership with the Pakistan Crypto Council (PCC). In a landmark deal, WLF executives led by Zach Witkoff & Co met Bilal Bin Saqib and other officials of Pakistan’s Crypto Council on 26th April 2025 in Islamabad, agreeing to help build Pakistan’s blockchain infrastructure, promote stablecoin-based remittances, and tokenize real-world assets. The signing came just days after a terrorist attack in Pahalgam, India, involving Pakistan-based groups. The agreement seeks to position Pakistan as a crypto-forward nation through: Regulatory sandboxes for blockchain finance. Tokenization of real-world assets (especially real estate and minerals). USD1 integration for remittances and cross-border trade. Advisory frameworks for national-level blockchain infrastructure.

WLF’s executives met not only with Prime Minister Shehbaz Sharif but also with Army Chief General Asim Munir, raising concerns that the partnership may help Pakistan operate a financial system outside global scrutiny of IMF or even FATF. Critically, the USD1 stablecoin could be used by Pakistan’s military and intelligence apparatus to move funds for illicit purposes. This could lead to the emergence of a "digital hawala" system that could facilitate money laundering, narco-terrorism financing, and terrorist operations activities long associated with Pakistan’s military-industrial nexus. The blockchain may anonymize transactions while avoiding traditional FATF and SWIFT oversight, making it ideal for laundering drug money from Balochistan, facilitating arms purchases for proxy actors and terrorist activities against India and siphoning remittances from overseas communities into opaque state-linked channels.

Such operations mirror historical CIA funding of proxy groups via drug and arms networks, but in this case, the crypto rails are privatized and digitally native. Intelligence-linked financial flows for various theatres like Colombia’s cocaine trade, Syria’s war markets, or Pakistan’s terrorist industrial complex could be rerouted through this opaque nature of private crypto-currencies in form of stablecoins. This is a financial gray zone that could neutralize AML/KYC enforcement, frustrate regulators, and deeply compromise global anti-terrorism finance frameworks despite US Congress regulating it through GENIUS Act. Such transactions may not be fully traceable given the fact some of it may be part of covert operations carried on by intelligence agencies.

Terrorist organizations are increasingly engaging with the crypto sector and exploiting developments in blockchain technology in order to raise funds and evade detection from the authorities. It has been found that major terrorist groups such as Al-Qaeda, Hamas’s al-Qassam Brigades and the Islamic State have been using crypto assets for an ever-growing range of objectives. These include sanctions evasion, cybercrime, extortion, investment trading, public fundraising and internal value transfers. On March 27, 2025, the United States Department of Justice (DOJ) announced a significant disruption of a Hamas terrorist financing scheme, following the seizure of approximately $200,000 in USDT used to fund the group’s activities by way of Crypto Currency.

ISKP (Islamic State in Khorasan Province), for example, promotes Monero in the magazine produced by its media unit. ISKP predominantly utilizes stablecoins to move and store funds. Furthermore, fundraising campaigns by ISKP overwhelmingly prefer stablecoins. ISKP’s official media arm in fall of 2023 launched its inaugural donation drive with Monero as the chosen currency. ISKP a terrorist group which has been propped up by Pakistan's ISI has been doing fundraising campaigns linked to other ISIS affiliates through solicited donations in Monero. Thus, private stablecoins (backed by UST) have turned to be preferred tools for terror financing. Explosion of private cryptos backed by USTs in America despite GENIUS Act regulations will offer opacity & plausible deniability to rogue military regimes like Pakistani Military’s, its Terror Industrial Complex including terrorist outfits.

5. Strategic Answer to China’s Digital Silk Road and CIPS

China’s eCNY and Cross-Border Interbank Payment System (CIPS) are the linchpins of Beijing’s plan to break U.S. financial hegemony. These tools allow China to trade in yuan, offer digital credit lines, and bypass sanctions, especially along the Belt and Road (BRI) corridors. In response, the U.S. is leveraging its greatest asset global trust in Treasuries to create a rival system of tokenized liquidity. USD1 and its clones will be exported across Africa, Asia, and Latin America as the default stable currency for trade, investment, and remittance. Because they offer dollar security and Treasury yield, which can eclipse yuan liquidity, especially in countries wary of Chinese control.

This move is less about decentralization and more about strategic containment. The U.S. doesn’t need to digitize the Fed through CBCD (Central Bank Digital Currency). It simply needs to outcompete China’s e-yuan via private-sector, Treasury-backed innovation, backed by military and diplomatic infrastructure. WLF becomes the spearhead of that doctrine. Treasury Secretary Scott Bessent has been an active proponent of regularising stablecoins to preserve status of US Dollar as reserve currency. He has emphasised this strategy in White House Crypto Summit in March 2025 and Donald Trump himself as championed US to lead Crypto innovation before China gets into this lane.

6. Weaponizing Financial Access to Realign Global Supply Chains

In the near future, access to USD1, U.S. capital markets, and defence technologies may come with new conditionalities. Nations wanting access to this digital dollar ecosystem could be required to delink from China’s BRI, realign critical supply chains, and adopt U.S.-approved digital identity frameworks. This is the geo-economic side of U.S. power i.e. linking finance, trade, and data into an integrated sphere of influence. Just as the U.S. forced alignment during the Cold War through NATO and IMF conditionalities, the crypto-stablecoin nexus could enforce 21st-century alignment through wallet access, node permissions, and liquidity flow controls. Countries may soon face a hard choice to either join the U.S. crypto-dollar bloc or risk exclusion from Treasury-backed liquidity. For many, especially Gulf nations, ASEAN economies, and African states, this may become the price of continued development finance and capital market access

7. The Dawn of Bi-Furcated Supply Chains with Multipolar Intermediaries

The stablecoin and crypto-finance race is only one front in a broader bi-furcation of the global supply chains. The U.S. and China are now building parallel ecosystems each with its own:

• Reserve currency and financial infrastructure

• Supply chain frameworks (CHIPS Act vs BRI industrial corridors)

• Digital payment systems (USD1, JPM Coin vs eCNY, CIPS)

• Trade blocs (IPEF vs RCEP)

• AI and quantum tech platforms

• IMF & World Bank Vs AIIB & BRICS Bank

• NATO Vs BRICS, SCO

Yet, countries like India, Russia, the UAE, and Turkey are leveraging their middle power status to extract deals from both camps. India resists joining either bloc fully, Russia looks East for sanctions relief, and Gulf states are now using stablecoin diplomacy to hedge against oil dependency. This is not a Cold War replay but a new digital multipolarity a fragmented, transactional world where tokens, not treaties, decide allegiance. America’s bet on Treasury-backed crypto is not just a fintech experiment; it is the foundation of a new imperial toolkit one where the next battle is not fought with tanks or tariffs, but with wallets, nodes, and programmable dollars.

Conclusion: Programmable Dollars, Programmable Power

The rise of Treasury-backed stablecoins like USD1 is not merely a financial innovation it is the foundation of a new form of statecraft, where programmable dollars become programmable power. In this emerging order, access to liquidity is no longer universal or neutral it is conditional, strategic, and politically coded. WLF and similar ventures mark the beginning of a new doctrine where private firms act as geopolitical enablers, underwriting U.S. influence across unstable regions through financial tools disguised as neutral fintech. As stablecoins proliferate under American political patronage, Washington won’t need to deploy boots on the ground or issue formal sanctions it will simply grant or revoke access to digital liquidity.

In this world, crypto isn't the enemy of the state it is the state, reimagined. While China pushes digital authoritarianism through eCNY, the U.S. is quietly engineering capitalist crypto-sovereignty, where the lines between public and private, diplomacy and commerce, are permanently blurred. As this new monetary battlefield takes shape, the question for nations is no longer whether to choose between East and West but whether they will own their financial destiny, or be tokenized by someone else’s empire.