Dollar, DeFi & the Battle for Global Monetary Order

Crypto Innovation & Stablecoins

The advent of blockchain technology has given birth to a new form of money which is decentralized, programmable, and global. Initially led by Bitcoin as a radical alternative to centralized fiat systems, the cryptocurrency movement has since evolved into a complex ecosystem of digital assets. Among these, stablecoins have emerged as the most commercially viable and widely adopted innovation, acting as a bridge between traditional finance and the decentralized world. Pegged to real-world assets such as fiat currencies, primarily the U.S. dollar, stablecoins offer the best of both worlds: the trust and stability of fiat and the speed, transparency, and global reach of crypto.

Unlike volatile cryptocurrencies like Bitcoin and Ethereum, stablecoins are designed for transactional purposes and real-world usage. They are the digital cash of the internet era, facilitating peer-to-peer payments, cross-border transfers, collateral in decentralized finance (DeFi), and even payrolls for remote digital workers. Leading the charge are dollar-backed tokens like Tether (USDT) and Circle’s USDC, which together process hundreds of billions of dollars in volume monthly. The efficiency and speed of these instruments are transforming global remittance corridors, international commerce, and treasury management, especially in regions with underdeveloped banking infrastructure.

However, innovation is not limited to just pegging a currency to a blockchain. Stablecoins are also becoming more sophisticated, incorporating features such as algorithmic stability, multi-collateral reserves, and smart contract automation. Institutional players are increasingly entering the space, validating stablecoins as legitimate financial instruments. From fintech startups to central banks and asset managers, everyone is looking to tokenize money in a secure and compliant manner. The underlying shift is profound that money is no longer a paper promise or a database entry; it is a programmable token that can operate autonomously, across platforms, and without intermediaries.

This innovation is not just reshaping payments but redrawing the architecture of financial sovereignty. Nations are realizing that if they do not issue their own stablecoins or digital currencies, foreign digital tokens may gain dominance within their borders. The rise of stablecoins is therefore not only a technological story it is a geopolitical and economic one, laying the foundation for a new global monetary order rooted in code, cloud, and control.

Adoption of Stablecoins in USA

The United States, despite regulatory ambiguity, is witnessing an explosive rise in the adoption and deployment of stablecoins. Leading the charge are private issuers such as Tether (USDT) and Circle (USDC), with market capitalizations exceeding $100 billion. These dollar-pegged stablecoins have become essential liquidity tools in crypto markets and have even started penetrating traditional financial infrastructure. But beyond crypto-native firms, mainstream U.S. corporations and financial giants are increasingly exploring and launching their own stablecoin projects, signalling a tectonic shift in how value is transacted, stored, and settled.

One of the most notable developments is the rise of WLF1, a stablecoin backed by U.S. Treasury Bills and created as part of a larger political-financial initiative linked to the Trump Family controlled World Liberty Financial. Designed as a tokenized dollar that could circulate globally, WLF1 represents a private-public fusion of monetary innovation, serving both as an election campaign tool and a speculative alternative to CBDCs. Similarly, tech and retail giants like Amazon and Walmart are actively exploring the launch of their own dollar-backed tokens. These would be used for internal logistics, employee payments, customer rewards, and potentially integrated into larger ecosystems for B2B settlements. Their scale and user base could dramatically increase the reach of stablecoins beyond the crypto-native population.

Meanwhile, Wall Street isn’t staying behind. Major banks like JPMorgan Chase & Goldman Sachs are reportedly exploring stablecoins backed by short-term U.S. Treasury debt for institutional payments between clients. These tokens would effectively serve as digital money-market funds on blockchain rails, allowing instant settlement of trades and 24/7 liquidity access. Asset-backed stablecoins are now viewed not just as payments tools but also yield-generating instruments capable of transforming the repo markets, corporate treasuries, and even sovereign finance.

This expanding ecosystem of stablecoins reflects a growing appetite for tokenized dollars not just in crypto trading but across e-commerce, remittances, enterprise finance, and capital markets. It is no longer a fringe innovation; it is the emerging infrastructure of digital capitalism. However, this proliferation also raises regulatory concerns about monetary policy transmission, systemic risk, and AML/KYC enforcement. Still, the market push is undeniable. With traditional institutions now integrating blockchain-native tools into their operations, stablecoins are not just here to stay they are poised to reshape the plumbing of global finance.

Genius Act & Clarity Act: Evolving US Crypto Regulation

As stablecoins and crypto assets gain prominence, U.S. lawmakers and regulators are under growing pressure to establish a clear and comprehensive legal framework. Two landmark legislative initiatives the Clarity Act and the Genius Act seek to bring order to the fragmented regulatory landscape. Together, these proposals aim to legitimize stablecoins, give them regulatory supervision by a regulator, protect consumers, and preserve U.S. leadership in digital finance while curbing risks posed by illicit use and financial instability.

Clarity Act: The Digital Asset Market Clarity Act of 2025 (H.R. 3633) aims to establish a comprehensive federal regulatory framework for digital assets, including private cryptocurrencies and stablecoins, by categorizing them as commodities, securities, or payment stablecoins, thereby clarifying jurisdictional oversight between the SEC and CFTC. For stablecoins backed by U.S. Treasuries (UST), the Act emphasizes a "federal-first" oversight model, primarily assigning regulatory authority to federal agencies like the Treasury Department, with state oversight permitted only if certified as equivalent to federal standards. It enforces compliance with existing banking regulations, such as anti-money laundering (AML) and consumer protection laws, requiring issuers to maintain 1:1 reserves with high-quality liquid assets like UST, alongside mandatory transparency through audits and disclosures. Enforcement mechanisms include civil penalties, cease-and-desist orders, and potential license revocation for non-compliance, aiming to reduce regulatory ambiguity while fostering innovation and protecting consumers from risks like fraud or de-pegging events.

GENIUS Act: The Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), passed by the Senate in June 2025, creates a tailored federal framework for regulating payment stablecoins, including those backed by UST, defining them as a distinct legal category separate from securities or commodities. It mandates that issuers maintain 1:1 reserves with safe assets like U.S. currency, Treasury bills, or demand deposits, ensuring redeemability at par value, and prohibits algorithmic stablecoins to prevent collapses like TerraUSD (UST). The Act establishes a dual regulatory structure: issuers with over $10 billion in market capitalization fall under federal oversight by the Federal Reserve and the Office of the Comptroller of the Currency (OCC), while smaller issuers can opt for state regulation if it aligns with federal standards. Enforcement includes strict AML and KYC compliance, regular audits, and penalties up to $100,000 per day for violations, with federal agencies like the OCC and FDIC empowered to revoke licenses or issue cease-and-desist orders to ensure financial stability and consumer protection.

In comparison to other jurisdictions, the U.S. is playing catch-up. The European Union’s MiCA (Markets in Crypto-Assets) framework has already laid out detailed rules for stablecoin issuers, exchanges, and custodians. Singapore and Hong Kong have created licensing regimes for digital asset firms, while Japan mandates stablecoin reserves in trust accounts at banks. China has outlawed decentralized crypto entirely but is pushing its own Digital Yuan (e-CNY) through tightly controlled pilots. The U.S., lacking federal coherence, risks ceding leadership in blockchain finance to more agile regulatory environments.

Nonetheless, the legislative trajectory in the U.S. reflects a broader realization that crypto is too big to ignore, and stablecoins, in particular, are now a matter of national interest. The regulatory focus is no longer about prohibition but about integration, oversight, and competition. In this emerging model, the dollar if properly tokenized and regulated can maintain its primacy in the digital world. These acts are not just about crypto; they are about shaping the future of money in the age of programmable finance.

FINTECH & INRCoins: India’s Digital Dilemma

India’s fintech ecosystem is one of the most dynamic in the world. In less than a decade, it has moved from cash dependency to one of the highest digital payment adoption rates globally, led by the Unified Payments Interface (UPI). Developed by NPCI, UPI has become the backbone of India’s retail payment system, processing over 10 billion transactions a month. However, the fintech landscape is rapidly evolving again with Central Bank Digital Currency (CBDC) pilots by the RBI and calls for rupee-backed stablecoins to complement the next stage of financial innovation.

The Digital Rupee, launched in pilot phases for wholesale and retail use, marks India’s first step into state-backed programmable money. It aims to offer the benefits of physical cash sovereignty, anonymity, and finality in a digital form. However, the CBDC is still under strict control, lacks interoperability with decentralized platforms, and is unlikely to serve as a tool for cross-border settlements or DeFi use cases. This is where rupee-pegged stablecoins could play a complementary role. Unlike the RBI’s closed-loop e-rupee, stablecoins issued by regulated private entities can integrate with global platforms, allowing Indian firms and individuals to transact, settle, and participate in the global Web3 economy.

The regulatory climate, however, remains cautious. India has not formally legalized crypto trading, levies a 30% tax on crypto gains, and lacks a stablecoin framework. Yet fintech leaders have argued for Agentic Payments i.e. AI-driven, wallet-based token payments using stablecoins under regulatory oversight. Such systems could integrate KYC/AML tools, allow programmability, and co-exist with UPI and CBDCs. The challenge is to design a framework that allows innovation without compromising financial surveillance, consumer protection, or monetary policy control.

There are legitimate concerns like Stablecoins could draw funds away from bank deposits, increasing fragility in the banking system. Poorly regulated stablecoins could be used for money laundering or terror financing. Moreover, the multiplicity of instruments like UPI, CBDC, wallets, stablecoins could lead to regulatory arbitrage and confusion. However, if thoughtfully regulated, INRCoins could supercharge India’s fintech sector, enabling tokenized trade settlements, blockchain-based lending, and machine-to-machine commerce.

In sum, India stands at a critical crossroads. It can choose to suppress private token innovation and double down on state-run digital systems, or it can craft a hybrid model where UPI, CBDC, and stablecoins coexist in a secure, interoperable, and innovation-friendly environment. The latter could position India not just as a consumer of fintech innovation, but as a global leader in shaping the future of programmable money.

However Indian government and the RBI must understand that as America is tokenizing US Dollar globally in trade with China deploying eCNY settlements in BRI, if we don’t act fast we could lose out to a big digital monetary innovation of the 21^st century. IRNCoins if regulated well could increase trade settlements, contracts, wages and even remittances from NRI’s faster insulating the payment systems by way of DeFi from the Dollar dominance. A basic KYC/AML compliance, with regular reporting’s and filings could mitigate a lot concerns the regulators may have.

USA Vs BRICS – The New Code War

A new global monetary architecture is quietly taking shape not in central banks or Bretton Woods institutions, but on blockchain protocols and smart contracts. At the heart of this revolution is the tokenization of money whether in the form of Bitcoin, stablecoins, or CBDCs. The U.S., recognizing the strategic edge of the dollar, is now leveraging USD-backed stablecoins to maintain its monetary hegemony in the face of challenges from China, BRICS, and the Global South.

The U.S. does not need a CBDC to project dollar dominance. Stablecoins like USDC, USDT, and WLF1 are achieving that digitally, offering the world instant access to dollar liquidity without relying on correspondent banks or SWIFT. This has profound implications for trade, remittances, and capital flows. These tokenized dollars are increasingly being used in global trade settlements, particularly in crypto-friendly jurisdictions, frontier markets, and among digitally-native firms. China, meanwhile, is deploying the Digital Yuan (e-CNY) and its CIPS (Cross-Border Interbank Payment System) to bypass the dollar and SWIFT. But its closed architecture and surveillance model have limited adoption outside its strategic sphere. In contrast, the U.S. dollar’s open, modular, and market-driven stablecoin architecture could prove to be more resilient and scalable.

Why is this Digital Monetary transition so important? Let us try and make sense of it. President Donald Trump recently remarked that BRICS was formed to challenge the US Dollar & losing the dollar as the global currency will be like losing a world war. Donald Trump then went on to say that he could impose tariffs on BRICS countries if they keep affronting the US Dollar’s status as reserve currency. However it must be remembered here that the US had weaponized the US dollar under the Biden Administration breaking international rules and norms by freezing Russian assets & Dollar reserves virtually financially embargoing out of the global financial system. This action of American and its European allies had natural consequences whereby countries & central banks started to sell treasuries and rather accumulate gold specially countries like China & India.

President Donald Trump is doubling down on trade & monetary settlement with coercive diplomacy to somehow protect the exceptionalism of US Dollar, while US is otherwise a hollowed-out economy with no mass industrial or manufacturing base. Trump Administration wants a zero-trade deficit with the rest of the world. If that happens, how will the other countries get hold of the US dollar to trade? They cannot! The only way for the dollar to be the world currency is for the US to run a trade deficit with everyone and if the US doesn’t run trade deficits there will be no takers if US debt which could mean higher interest’s rates and ultimately a collapse of the dollar system. This is why Trump Administration has sought to delay the inevitable decline of dollar giving America a short window to re-shore & re-industrialise itself. This America does not care about its global empire Pax Americana and rather seeks to de-industrialise the Eastern manufacturing giants so that America could benefit totally throwing to winds the WTO system which it itself created.

One of the primary reasons the world is seeking to decouple from the U.S. dollar is the structural fragility and moral hazard embedded in the American financial system. The United States runs persistent fiscal deficits, now exceeding $2 trillion annually, and carries a debt load of over $35 trillion a figure so large it defies repayment in any traditional sense. Yet, thanks to the dollar’s global reserve status, the U.S. can print, borrow, and inflate its way through crises without immediate consequence. Foreign central banks and sovereign wealth funds notably in Japan, China, and the Gulf are trapped into buying U.S. Treasuries to keep the system afloat, receiving in return rolled-over interest payments on a debt that will never be meaningfully repaid.

This is not a bug but a feature of the system. As French President Valéry Giscard d'Estaing once remarked in the 1960s, the dollar gives the U.S. an “exorbitant privilege” the ability to run deficits without tears, to pay for foreign goods and wars in a currency it controls. This privilege has now become a source of deep resentment, especially as America continues to weaponize its currency through sanctions, threatening countries that refuse to align with its geopolitical agenda. The Swift cutoffs, dollar embargoes, and seizure of sovereign reserves as in the case of Russia in 2022 or Afghanistan’s central bank assets have exposed the dollar’s role not as a neutral medium of exchange, but as an instrument of imperial enforcement.

At home, the U.S. financial system increasingly resembles a Fugazi economy an illusion of wealth propped up by liquidity injections, asset inflation, and a stock market now valued at over $60 trillion, far disconnected from real economic output. The Federal Reserve’s ability to monetize debt has not only fuelled stock buybacks and speculative bubbles, but has also distorted the global cost of capital, forcing emerging markets into a dollarized trap. When the Fed raises rates, capital flees the Global South; when it prints, inflation spills across borders. Crucially, the dollar’s dominance underwrites the U.S. military-industrial complex, allowing it to fund a $900 billion defence budget, maintain hundrerds of military bases across 80 countries, and engage in endless wars of choice from Iraq to Libya, Syria, and beyond. These wars, financed on borrowed time and borrowed money, come with little domestic accountability. But the rest of the world bears the cost in instability, inflation, and lost sovereignty.

It is in this context many countries are building alternatives from yuan-based trade in Asia, to gold-backed crypto, to BRICS tokenized settlements. The movement to dethrone the dollar is not just about economics it’s about escaping a system that rewards debt, domination, and delusion at the expense of global balance and financial justice. The world is changing and with it, the tectonic foundations of global finance. The 2025 BRICS Summit in Rio de Janeiro marked a milestone in this transformation. In its declaration, BRICS leaders tasked their finance ministers and central bank governors to intensify work on the BRICS Cross-Border Payments Initiative, emphasizing fast, low-cost, transparent, and safe financial interoperability among member states and likeminded nations. The BRICS Payment Task Force, long derided by sceptic’s as symbolic, is now laying real technical groundwork for a multipolar monetary system an open challenge to the dollar-dominated financial order.

India's Ministry of External Affairs Secretary Dammu Ravi echoed this shift, declaring India's full support for the initiative and citing the Unified Payments Interface (UPI) as a proof-of-concept. With India already entering bilateral payment interoperability agreements with nations across Asia and the Gulf, the building blocks for a post-SWIFT era are clearly underway. Once trade and financial flows bypass SWIFT and the dollar, nations will finally be shielded from unilateral U.S. sanctions a deeply entrenched tool of financial warfare masquerading as diplomacy.

Washington’s post-World War II financial empire anchored by the World Bank and the International Monetary Fund (IMF) is the real "debt trap". These institutions, headquartered in Washington, D.C., function as the economic shock troops of Western hegemony. The World Bank is always led by an American, the IMF by a European, and the U.S. holds veto power in both. Their so-called “development loans” often serve as Trojan horses deliberately structured for failure. When a developing nation defaults, the solution offered is always the same: privatize your banks, utilities, ports, and natural resources, surrender sovereignty, and impose austerity. In short open your country to a neoliberal fire-sale and become a satellite of Western finance.

BRICS+ is the long-awaited counterweight to this parasitic model. Though the idea of a common BRICS currency remains politically radioactive especially given U.S. threats, a cross-border payment system using national currencies is gaining unstoppable momentum. Over 90% of Russia’s trade with BRICS+ members is already conducted in roubles and local currencies. ASEAN is building its own currency arrangements for trade and tourism. The yuan is being adopted for energy settlements. African nations are building intra-African payment systems using local units. And India is pushing the rupee in bilateral trade deals.

These are not isolated experiments they are part of a coordinated global exit from the U.S. dollar. Trump’s open threats to punish countries seeking de-dollarization echo the fate of Saddam Hussein and Muammar Gaddafi, both of whom were eliminated after challenging dollar supremacy. The message was clear: dare to de-dollarize, and face the wrath of the empire. But today’s world is no longer unipolar. As Brazilian President Lula put it, “We don’t want an emperor. We are sovereign countries.” The decline of dollar is irreversible as Central banks are stockpiling gold with the Trust in U.S. fiscal discipline crumbling. The dollar is bloated by a fugazi economy of infinite debt, endless printing, and asset bubbles detached from reality. BRICS+, in contrast, represents a return to financial sovereignty, multipolarity, and monetary justice.

Under Donald Trump, the United States views the accelerating shift toward non-dollar trade settlements under BRICS+ as a direct and existential threat to its global hegemony. The rise of cross-border payment systems that bypass SWIFT, coupled with national currencies gaining traction in trade, undermines the very foundation of America's imperial financial architecture. This geopolitical insecurity intensified by ballooning U.S. debt and a crumbling fiscal façade is driving Trump to embrace an aggressive new strategy i.e. unleashing crypto innovation through dollar-backed stablecoins. By tokenizing the dollar via instruments like WLF1 etc and integrating them into global fintech and trade rails, the U.S. aims to hyper-dollarize the digital economy, locking nations into a blockchain-based dollar zone.

At the same time, Trump’s administration is weaponizing trade deals through coercive diplomacy, warning partners that access to American capital, financial markets, and cutting-edge technology will be contingent upon compliance with U.S.-centric systems. The message is stark that either u transact in tokenized dollars or be shut out of the American-built financial order. However, countries like Japan, India are pushing back. Former Prime Minister Kishida recently said “We cannot allow a country that seeks to impose its will through force to shape the international order.” Prime Minister of Japan Ishiba recently remarked: “We must make greater efforts to become more independent from the United States. This is a battle for our national interest. Don’t you date take us lightly! Even if it’s an ally, we must speak up openly and with integrity when something needs to be said.” Even India’s commerce minister Piyush Goyal remarked that national interest is prioritised over deadlines and India will protect its interests in any trade deal with USA alluding to fierce protection of its agriculture and diary sector which is the heart beat of Indian economy.

This unfolding struggle is no longer just about currencies or trade protocols it represents a profound realignment of global power and principles. As the United States, under Trump, attempts to entrench its dominance through tokenized dollars and coercive trade diplomacy, nations like Japan and India are asserting a new kind of strategic autonomy. Their resistance signals a broader refusal to submit to digital dollar hegemony masked as innovation. The West envisions a future governed by algorithmic finance and programmable capital under U.S. control, but the East is charting a path rooted in sovereign digital resilience, safeguarding core sectors like agriculture, industry, and financial infrastructure. This is not simply a debate over technology it’s a geopolitical crossroads. The contest over who writes the rules of value in the 21st century through code, currency, and cloud will shape not just markets, but the moral architecture of global order.

As empires age and their debts spiral during economic downturns, history shows a predictable pattern: when borrowing becomes unsustainable and repayment impossible, a financial bubble inevitably bursts. In such moments, nations face a stark choice default or devalue. Almost always, they choose the latter, printing money to keep the system afloat. Initially, the flood of new money is measured and discreet. But as fiscal pressures mount and confidence erodes, the money printer roars louder, fuelling inflation and debasing the currency. The U.S., like the Dutch during the costly Fourth Anglo-Dutch War or the British after two devastating world wars, now finds itself at the tipping point of its own imperial arc.

America has already endured three major debt-financed booms since the mid-20th century the Dot Com Bubble, the Subprime Mortgage Crisis, and the Pandemic Crash. Each time, the Federal Reserve has responded with stronger monetary firepower, deepening dependence on stimulus and artificially inflating asset markets. But now, that monetary medicine has become poison. With debt surpassing $35 trillion, and deficits ballooning with no end in sight, the U.S. empire is frantically trying to preserve its global dominance not through innovation or strength, but through control, coercion, and the illusion of solvency.

Trump Administration is pushing the Federal Reserve to lower interest rates, print money and inflate its way out of debt and create an asset bubble once again. Probably the last hurrah of the empire before it faces its day of reckoning. Every Asset bubble inflates the value of assets masking the eroding wealth of the man on the Main Street while the Wall Street laughs its way to Tax Havens before busts.

Domestically, this descent into financial fragility is widening the gulf between rich and poor, fuelling racial, ethnic, and ideological conflicts. As living standards decline for the majority, the political spectrum polarizes. The left demands wealth redistribution. The right rallies to protect elite privilege. Taxes rise, capital flees. Billionaires, fearing expropriation, are already moving assets into offshore havens, private vaults, cryptocurrencies, and foreign real estate. This exodus of capital accelerates the decline, creating a self-perpetuating hollowing-out of the empire from within.

In desperation, the U.S. government resorts to tighter capital controls, regulatory crackdowns, and even threats of punishment against those who seek to exit the sinking system. The panic feeds itself as productivity stalls and the economic pie shrinks. The scramble for what remains becomes more brutal. In such moments, history warns us, democracies begin to fracture. Populist strongmen emerge left or right promising order amid chaos, national greatness amid decline. They vow to crush dissent, subdue enemies within, and reclaim lost glory.

This is the juncture at which the United States now stands. It is not merely defending a currency it is defending an empire built on that currency. The dollar is its last weapon of control, and its dominance over trade, capital markets, and technology is being guarded with increasing aggression. Washington is using trade deals, tokenized stablecoins, sanctions, and diplomatic threats to hyper-dollarize global finance before rivals can break its grip. The desperation is palpable as the empire knows the tide of history is turning and it is doing everything it can to stop the clock, even as it slips into the familiar twilight of imperial overreach.