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Restructuring the Monetary System<\/strong><\/p>\r\n\r\n\r\n\r\n But now they have come to understand that the Trump team will base its policy on cryptocurrencies that will be pegged to the dollar as part of their strategy to restructure the global monetary system.<\/p>\r\n\r\n\r\n\r\n What has unsettled central bankers this spring was the implications of Trump\u2019s policy: a deliberately chaotic disintegration of the twentieth-century monetary order, under which central banks reigned as the sole architects of the monetary order. While the GENIUS Act allows for private stablecoins, another bill would prohibit the Federal Reserve from issuing a central bank digital currency (CBDC), thus anointing corporate-issued tokens as the \u201cnew guardians\u201d of the dollar\u2019s \u200b\u200bhegemony.<\/p>\r\n\r\n\r\n <\/p>\r\n\r\n\r\n\r\n The Trojan Horse for Private Money<\/strong><\/p>\r\n\r\n\r\n\r\n This is not an innovation: it is a \u201chostile takeover\u201d of the money supply. Without anything resembling serious regulation, stablecoins are neither stable nor simply an alternative payment option to dollars. They are a \u201cTrojan Horse\u201d for the privatization of money.<\/p>\r\n\r\n\r\n\r\n The European Central Bank sees the danger. If securities migrate to the blockchain, with bonds, stocks and derivatives becoming tokens, then digital clearing of transactions must follow. The ECB\u2019s solution is a \u201ceuro token,\u201d ensuring that public money remains the foundation of the financial system.<\/p>\r\n\r\n\r\n\r\n So far, the ECB has faced resistance to this plan from German and French private banks. Now, the ECB has another, bigger headache: the United States is running in the opposite direction. By banning CBDCs and greenlighting stablecoins, the Trump team isn\u2019t just rejecting public digital money. It\u2019s handing the dollar\u2019s \u200b\u200bprivileged status over to the darkest forces within Big Tech.<\/p>\r\n\r\n\r\n\r\n The irony is stark \u2013 he notes \u2013 The same liberals who are protesting the government are now begging the government to anoint their stablecoins as the de facto official currency.<\/p>\r\n\r\n\r\n <\/p>\r\n\r\n\r\n\r\n Worse, they require access to the Federal Reserve\u2019s balance sheet, allowing private issuers to back their tokens with central bank reserves.<\/p>\r\n\r\n\r\n\r\n Imagine a world where Tether, Circle, or some Elon Musk-backed \u201cX Token\u201d enjoys the implicit backing of the U.S. Treasury while operating outside of banking regulations.<\/p>\r\n\r\n\r\n\r\n This isn\u2019t just regulatory arbitrage, it\u2019s the monetary feudalism of the new monetary middle ages. It\u2019s a reminder that nineteenth-century America was a monetary dystopia.<\/p>\r\n\r\n\r\n\r\n With thousands of rogue banks issuing private paper money, frequent financial panics led the public, and especially the working class, to hold worthless paper money.<\/p>\r\n\r\n\r\n\r\n Even JP Morgan was so terrified and felt so threatened that it decided to pressure the federal government and other bankers to establish the Federal Reserve as a public institution with the responsibility of stabilizing money. Now, the US is backing down \u2014 and dragging the rest of the world with it.<\/p>\r\n\r\n\r\n\r\n In a stunning reversal of reality, Trump\u2019s January 23 executive order on Strengthening American Leadership in Digital Financial Technology designates dollar-backed stablecoins as means to \u201cpromote and protect the sovereignty of the dollar.\u201d<\/p>\r\n\r\n\r\n\r\n But the GENIUS Act (whose final draft has yet to be made public) is a formula for unleashing a digital age of \u201cwild\u201d cryptocurrencies, where stablecoins \u2014 pegged to the dollar but controlled by private entities \u2014 flood the global economy with digital pseudo-dollars.<\/p>\r\n\r\n\r\n <\/p>\r\n\r\n\r\n\r\n Private stablecoins have no chance of maintaining their token peg to the dollar once they receive official federal approval and the currency bubble bursts.<\/p>\r\n\r\n\r\n\r\n Even if countries abandon the dollar, they will remain trapped in its digital shadow. Europe is struggling to catch up. The ECB, recognizing the existential threat, is accelerating the process \u2013 but it will likely be caught up in the process.<\/p>\r\n","protected":false},"excerpt":{"rendered":" Donald Trump\u2019s attempt to expand the dollar system through stablecoins. Trump wants to limit the supply of the dollar and its parity in order to reduce trade deficits while at the same time not wanting the US currency to lose its privileged status as the world\u2019s reserve currency. This can be successfully done by integrating … <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[105,59,106],"tags":[83,640,237,937,859,963,131,964],"class_list":["post-2861","post","type-post","status-publish","format-standard","hentry","category-developed-economies","category-proposed-fiscal-policies","category-us","tag-dollar","tag-donald-trump","tag-economy","tag-federal-reserve","tag-fiat-money","tag-stable-coins","tag-supply","tag-tokens"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/2861","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/comments?post=2861"}],"version-history":[{"count":2,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/2861\/revisions"}],"predecessor-version":[{"id":2863,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/posts\/2861\/revisions\/2863"}],"wp:attachment":[{"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/media?parent=2861"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/categories?post=2861"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trusteconomics.eu\/index.php\/wp-json\/wp\/v2\/tags?post=2861"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2025\/05\/image-195-1024x666.png\")
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