Dollar Stablecoins: A New Form of Currency Colonization in the Digital Age

In the early 16th century, Spain transformed from a small peninsular nation into a "world empire" spanning three continents. Its invincible fleet swept across the oceans, establishing a vast colonial system. Spain took away gold and silver, and also brought the world's first true global currency: the Spanish dollar.

This silver coin was extensively mined in the Americas, transshipped via Manila, and ultimately became a medium of exchange for Chinese tea, porcelain, and silk. For the Spanish colonial system, the key was not in enslavement or plunder, but in establishing an intercontinental settlement system. The silver dollar became the physical bearer of imperial credit.

In July 2025, the United States signed the GENIUS Act. This seemingly technical stablecoin regulatory bill actually marks the beginning of a new era of digital colonization for the US dollar. Its essence is to allow countries and people who, for various reasons, cannot directly access the US dollar to conveniently use, store, and settle in dollars through blockchain stablecoins.

This method no longer relies on traditional banking systems or military deployments, but instead outputs sovereignty through digital technology. On-chain dollar stablecoins, just like the silver dollars of yesteryear, have become a new tool that penetrates the global financial system.

The "GENIUS Act" not only establishes a federal framework for the issuance of stablecoins, but also establishes several far-reaching mechanisms:

1. Payment stablecoins must have a 1:1 actual reserve, with supported assets limited to cash, U.S. Treasury bonds, or FDIC deposits.
2. The issuer must be a federally chartered bank or an accredited state regulatory agency.
3. Prohibit interest payments, but provide advantages of on-chain instant settlement and cross-border payments.
4. Foreign issuers circulating in the U.S. market need to establish local reserves and compliance frameworks.

The core of this bill is to create a standardized template for a programmable dollar, initiating the Web3 API transformation of the US financial and dollar settlement mechanisms. It provides legal status for stablecoins like USDC, which are essentially digital representations of US Treasury bonds and the dollar.

The biggest feature of on-chain stablecoins is their permissionlessness and programmability. Once embedded in a country's payment system or e-commerce platform, it is no longer considered a "foreign currency," but becomes a digital infrastructure for automated payment, settlement, clearing, storage, and even wealth management executed by smart contracts.

For countries currently experiencing currency devaluation and capital controls, stablecoins have become a refuge for people seeking a "dollar anchor". According to research, over 30% of global stablecoin transactions in 2024 will occur in non-OECD countries, which are areas with weak coverage of the traditional U.S. financial system.

For example, Argentina and Nigeria:

Argentina has long been plagued by hyperinflation and strict capital controls. Since 2023, local residents have started to bypass the banking system to obtain "digital dollars" through on-chain wallets, using stablecoins to pay for rent, salaries, online shopping, and even to settle cross-border freelancing.

After Nigeria banned cryptocurrency trading, users continued to trade USDT/USDC on a large scale through peer-to-peer markets. Stablecoins have become the default tool for scenarios such as import trade, tuition payment, and technology going abroad.

These two cases illustrate that local residents no longer rely on local banks as a gateway to access US dollars, but instead depend on on-chain wallet addresses. The government's foreign exchange controls on the US dollar have nearly become ineffective.

Even in China, despite the existence of capital account controls, many users have been practicing "saving dollars" by holding USDC and USDT through on-chain wallets, and even participating in global on-chain wealth management. Although these activities are not officially supported, they are also difficult to completely prohibit.

Stablecoins have become a digital form of dollar securitization penetration tool, transforming the dollar into "code assets" that can circulate peer-to-peer, bypassing the banking system to enter the wallets of global internet users. This is breaking traditional capital boundaries, and the passage of the GENIUS Act will provide legal protection for this behavior.

The business philosophy of ancient Chaozhou banks in China emphasizes: "The way of the bank is not in settlement, but in circulation." The GENIUS Act is essentially creating a "digital Chaozhou bank," making the US dollar an indispensable "digital circulating unit" in daily life.

When the US dollar stablecoin becomes a kind of "digital air" for life, it is no longer just currency, but the foundation of the entire financial order.

The GENIUS Act is not just a regulatory framework, but a profound reconstruction of monetary infrastructure. It allows the US dollar to penetrate any area that has not yet dollarized through code and on-chain contracts. In the future, the US dollar will no longer rely on traditional banks, the SWIFT network, or military hegemony, but rather on users' browsers, wallet plugins, and protocol APIs.

This invisible global digital colonization is unfolding before our eyes. The new order of world finance will be dominated by code, contracts, and stablecoin providers. The digital invincible fleet has set sail, stablecoins are the modern version of silver dollars, protocols are the new maps, and on-chain wallets are the digital ports. All of us are waiting at the ticket gate of this transformation.