To The Moon

Stablecoins are no longer just crypto tools — they’re the foundation of a new global dollar system, and Circle is leading the charge.

$Circle Internet Corp.(CRCL)$ the company behind the USD Coin (USDC), went public on June 5 at $31 per share. Less than a month later, the stock skyrocketed to nearly $300 — an over 800% surge. That’s not just a rally — it’s a signal: stablecoins are no longer niche; they’re now the centerpiece of global financial innovation.

On June 17, the U.S. Senate passed a bill known as the Lummis-Gillibrand Payment Stablecoin Act, creating the country’s first national framework for regulating stablecoins. This is a monumental step. For the first time, dollar-backed stablecoins like USDC are officially being folded into the U.S. regulatory and financial system.

So, what is a stablecoin? Put simply, it’s a type of digital asset designed to maintain a 1:1 peg to a fiat currency — usually the U.S. dollar. USDC, for instance, is fully backed by real dollar reserves. For every USDC issued, Circle holds a corresponding U.S. dollar (or equivalent liquid asset) in reserve — stored in regulated U.S. financial institutions and subject to regular audits by top accounting firms.

This means when users deposit dollars into Circle, they receive an equal amount of USDC. When they redeem USDC, Circle burns the tokens and returns the equivalent in dollars. This mint-and-burn mechanism is what keeps USDC stable.

But the real magic of stablecoins isn’t just price stability — it’s utility.

With USDC, global users can effectively convert their local currency into U.S. dollars and access the dollar-based financial system — without going through banks, without exchange limits, and without being subject to traditional capital controls. You can use USDC to buy goods, pay for services, invest, or even buy property. And now, with regulation on its side, stablecoins are becoming even more powerful.

Why It Matters for the U.S.

Stablecoins are a Trojan horse for dollar dominance. They give the dollar a new channel to absorb global capital — especially from regions facing inflation or currency devaluation. In a world where many countries limit direct dollar access, stablecoins offer a workaround. They're becoming the on-ramp for global dollarization.

This is huge for U.S. interests. By backing the growth of stablecoins, the U.S. isn't just embracing crypto — it’s weaponizing it. Stablecoins extend the reach of U.S. monetary power into crypto markets, allowing the U.S. to absorb global liquidity, bolster Treasury demand, and maintain its monetary hegemony even as traditional financial rails age.

That’s why the Senate didn’t hesitate to vote this through.

Global Demand Is Surging

Stablecoin use is exploding outside North America. As of May 2025, over 58% of stablecoin transactions on Ethereum and Solana came from non-U.S. regions — up from just 13.7% in 2021. This isn’t just about crypto traders; in many emerging markets, stablecoins are now a key tool for storing value and protecting wealth from local inflation.

Circle’s USDC allows people in Turkey, Argentina, or parts of Africa to preserve value, send money across borders instantly, and access global markets. It's fast, cheap, and always on — unlike the traditional banking system.

In cross-border remittances, stablecoins reduce fees from an average of 6.6% (traditional banks) to under 3% — sometimes as low as 0.5%. That’s transformative.

So if you think Circle’s stock is expensive at $240, consider the bigger picture: this is just the beginning.

The Bigger Play: The New Dollar System

The U.S. government sees stablecoins — especially dollar-backed ones — as the next generation of financial infrastructure. Think of them as an automated Treasury bond vending machine. Here's how:

You give Circle $1 and receive 1 USDC.

Circle takes that dollar and buys Treasuries.

While you use USDC in crypto markets, Circle earns interest from T-bills.

This creates a new layer of demand for U.S. debt — driven by retail and global investors, not just central banks. Tether (USDT), another major stablecoin, now holds over $113 billion in U.S. Treasuries — making it one of the top 10 holders in the world.

Imagine what happens when the stablecoin market 10x’s — the U.S. could gain trillions in indirect Treasury demand from global retail capital. That’s why the U.S. Treasury and Fed are fully onboard.

This new dollar-stablecoin-Treasury ecosystem could reduce the pressures of the Triffin dilemma and act as a buffer in the next financial crisis. It allows the U.S. to inflate, monetize debt, and still maintain international trust — all while crypto does the distribution work.

What About China?

China’s taking a different route. While the U.S. is scaling dollar stablecoins, China is using Hong Kong as a staging ground to push yuan-based stablecoins and influence the rules of the game. The goal? Make stablecoins a bridge for Chinese trade and capital flows — particularly in commodities and international trade, where China has strength.

By introducing regulation in Hong Kong first, encouraging Chinese firms to list there, and pushing for regional adoption, China hopes to absorb global liquidity into yuan-backed digital assets.

But for now, dollar stablecoins dominate — 99% of stablecoins in circulation are dollar-backed. That’s why the U.S. wants to grow the stablecoin market from today’s $250B to $2T by 2028 — and potentially $10T+ when you factor in leverage, derivatives, and tokenized assets like stocks and bonds.

Risks and Considerations

Of course, this shift isn’t risk-free.

Stablecoin depegging could trigger financial chaos.

Regulatory differences between countries could create fragmentation.

Technology challenges, like scalability and smart contract vulnerabilities, must be managed.

And traditional banks? They're at risk of being disrupted — but also have new opportunities. Banks that adapt and integrate stablecoin services (custody, settlement, products) could thrive in this new system.

For investors, the key is understanding the mechanics behind each stablecoin — the reserves, transparency, audits, and legal frameworks. Not all stablecoins are created equal.

The future is digital, and stablecoins are the bridge between crypto and traditional finance. They’re not just a trend — they’re becoming the rails of the next global monetary system.