How America’s Stablecoin Gamble Could Backfire—and Hand China the Advantage

By passing the GENIUS Act, the United States has signaled its commitment to building a stablecoin-based economy. Through this initiative, it aims to reinforce the global dominance of the dollar. However, Yanis Varoufakis views it as a recipe for disaster. 

In an exclusive interview with BeInCrypto, the Greek economist and former finance minister warned that the legislation could trigger a financial crisis even more severe than in 2008. Against this backdrop, he argues that China’s more state-controlled and disciplined approach to economic power is better positioned to prevail.

Since the end of the Bretton Woods era, the United States has maintained its global dominance largely through financial power and dollar supremacy.

However, this dominance, once supported by a solid industrial base, has evolved as America’s manufacturing capacity has declined. Today, Washington’s influence rests instead on two pillars: Silicon Valley’s command of Big Tech and the dollar’s control over international payments.

This ability to route most global transactions through the US financial system gives Washington immense leverage. It allows the country to impose sanctions, finance deficits at low cost, and maintain its geopolitical influence.

“If you want to send money from anywhere to anywhere, you have to go through the dollar system… That’s why [the US is] using sanctions as a weapon against anybody that they don’t like, for better or for worse,” Varoufakis told BeInCrypto, adding, “It’s the hegemony of the dollar that makes America not great, but strong. And they know that if they lose that, they’re finished.”

Now, in a bid to reinforce its dollar dominance, the US is turning to stablecoins.

In November 2024, American economist Stephen Miran—a close ally of Trump and now a member of the Federal Reserve Board—introduced an economic framework known as the Mar-a-Lago Accord. 

At its core, the plan entailed a controlled devaluation of the dollar to reduce trade deficits and revive US manufacturing, while maintaining the currency’s role as the world’s reserve standard.

“On one hand, [Miran] wants to reduce the exchange value of the dollar. On the other hand, he wants to keep the dollar as the main payment system in the world,” Varoufakis explained.