TLDR
- The Genius Act legalizes Treasury-backed stablecoins, expanding dollar access globally.
- Tether and Circle are major stablecoin issuers holding billions in U.S. Treasuries.
- Bitcoin’s Lightning Network offers secure, private infrastructure for global payments.
- Bitcoin’s decentralized network ensures greater privacy compared to centralized blockchains.
As global trust in U.S. bonds weakens and demand declines, the U.S. has turned to digital innovation to protect its financial position. The Genius Act, passed in July 2025, legalizes Treasury-backed stablecoins. This bold move opens new demand for the U.S. dollar abroad—and positions Bitcoin’s decentralized network as a powerful, neutral infrastructure to move these stablecoins across borders with speed, privacy, and resilience.
Global Decline in Bond Demand Spurs Policy Shift
Foreign interest in U.S. Treasury bonds has declined sharply, forcing the government to offer higher yields. The 30-year Treasury bond yield hit 4.75% in September 2025, the highest level in 17 years. This adds pressure on the national budget, increasing the government’s annual debt servicing cost to nearly $1 trillion.
China, once the largest holder of U.S. debt, has reduced its position from $1.25 trillion in 2013 to around $750 billion. Analysts link this to concerns over U.S. sanctions. In 2022, the U.S. froze Russia’s dollar reserves and blocked debt repayments during the Ukraine conflict. That move raised doubts about the dollar’s neutrality, leading many countries to seek alternatives.
Stablecoins Create New Demand for U.S. Treasuries
As traditional buyers pull back, stablecoin issuers have stepped in. Tether, the company behind USDT, holds about $171 billion in short-term U.S. Treasuries. Circle, which issues USDC, owns around $50 billion in government debt. These companies issue stablecoins backed 1-to-1 by these bonds and earn returns through interest payments.
The growing use of stablecoins is not limited to crypto traders. In Latin America, Africa, and Asia, stablecoins serve as a dollar alternative where local currencies are weak or access to dollars is restricted. Chainalysis reported over $1 trillion per month in stablecoin transactions in 2025. Tether and USDC dominate that volume.
Bitcoin Emerges as a Secure Global Payment Network
While most stablecoins run on centralized blockchains like Tron and Ethereum, experts are turning their focus to Bitcoin’s network. Bitcoin’s decentralized structure and the Lightning Network offer faster transactions with lower fees and better privacy.
Tron, for example, is run by a limited number of validators and is tied to entrepreneur Justin Sun. This centralization raises censorship concerns in politically sensitive regions. Bitcoin avoids this problem with thousands of independent nodes worldwide. Its network is less vulnerable to shutdowns or manipulation.
The Lightning Network allows users to send payments off-chain, enhancing privacy. These transactions do not appear on the public blockchain, protecting users in regions where financial surveillance is high. This feature could make Bitcoin a preferred infrastructure for stablecoins in emerging markets.
Genius Act Sets the Stage for a New Dollar System
The Genius Act introduces legal backing for stablecoins tied to U.S. Treasuries, creating an official framework for dollar-based digital money. This allows the U.S. to reach new users abroad without relying on local banks, many of which resist foreign currencies due to regulatory pressure.
According to Chainalysis, “The stablecoin regulatory landscape has evolved significantly… its passage has driven strong institutional interest.” With Treasury-backed stablecoins now legal and USDT coming to Bitcoin’s Lightning Network, the dollar is set to expand its reach globally using decentralized tools.
By using Bitcoin’s infrastructure, the U.S. could maintain demand for its debt, offer greater access to its currency, and navigate the global shift toward a multipolar economy.
