 |
During a meeting with technology, crypto, and finance leaders held at the White House yesterday, President Trump brought up the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) again.
 |
Trump framed the Act as part of his administration’s broader crypto and digital-asset agenda (ending what he called the “war on crypto,” launching “Project Crypto,” establishing a U.S. Strategic Bitcoin Reserve, and creating a Digital Asset Stockpile):
“One year ago this summer, I signed landmark legislation known as the GENIUS Act. … paving the way for widespread adoption of dollar-backed stablecoins, and that’s worked out very well.”
Indeed, the Act was already passed last summer and Trump signed it into law on 18 July 2025, so why all the commotion about it now, more than a year later?
Could be earth-shattering…
Treasury Secretary Scott Bessent tweeted that, the GENIUS Act established a landmark framework and clear rules of the road for payment stablecoins, and that the Treasury is moving quickly to implement that framework asking for “input from stakeholders” in order to “cement the role of the U.S. dollar as the world’s reserve currency, and keep America the crypto capital of the world.”
The Act defines new US federal laws creating a comprehensive regulatory framework for payment stablecoins redeemable for a fixed monetary value (typically $1) and intended to maintain a stable value relative to the “legal tender” currency. It also restricts the issuance of stablecoins to “permitted payment stablecoin issuers,” and this is where the GENIUS Act gets extremely interesting.
What GENIUS is all about…
Speaking at the SALT Confrence at Jackson Hole, Wyoming, the former Wall Street executive and prominent advocate for monetary reform Caitlin Longpointed out that the GENIUS Act enables the Treasury Department to define “what is allowed to be a so-called euro-dollar, euro-yen, euro-euro. Or Yuan, right?” She continued:
“… the term ‘euro’ doesn’t mean European. It means a dollar issued offshore outside of the United States … These are tokenized fiat currencies issued outside of their home country, and the U.S. Treasury is taking charge of the recognition of the validity of these. That is massive.
The fact that there are institutions outside of the United States that can issue US currency, should be regarded as an illegal aberration. Effectively, they’re counterfeiting US dollars, but in spite of that, for some reason, it has been taken as normal for decades now. That’s in spite of the fact that counterfeiting US dollars abroad effectively robs the purchasing power American taxpayers to fund any manner of nefarious activities. Most likely, that’s why this system was allowed to grow to such massive proportions. Caitlin Long again:
… If you’re a student of the financial markets, you know that the eurodollar market is as large as the domestic financial market. That’s the offshore dollar market. When the U.S. Treasury is taking control of what is recognized as valid, that is taken from the Fed. … The Treasury is taking power back over the U.S. dollar, over the eurodollar markets, and, frankly, over the U.S. role in the financial system globally from the Fed.”
Long made these comments after discussing the GENIUS Act with “someone who just walked out” of a Treasury department meeting, and if she is right (I believe she certainly is), the implications could be truly earth-shattering. To begin with, disenfranchising the Fed and taking control over the currency from them is the stuff of civil wars.
To put that into context, when we were talking earlier about how antiquated the traditional system is and that the Fed’s systems are themselves behind… If you’ve been watching, all of the other agencies have issued rules [in accordance to GENIUS Act]. One glaring exception: the Fed has not issued its rules yet, and according to the GENIUS Act, all of the agency’s rules were supposed to be final a couple of weeks ago. The Fed hasn’t even issued theirs yet, so there’s this dynamic going on between the Treasury Department and the Fed.
“The dynamic” going on between the Treasury Department and the Fed is a political collision course where the Treasury is trying to wrest the control over the monetary system from the unelected private bankers to the democratically elected government and its legitimate institutions.
I know, I know… The idea that the Trump administration is doing anything “legitimate” may defy imagination by now, but the current arrangement is anything but legitimate. It is also patently unconstitutional: the Constitution of the U.S. explicitly authorizes the Congress with the power “To coin Money, regulate the Value thereof…” (Art. 1, Section 8, Clause 5). The Constitution also gives Congress the power “to provide for the punishment of counterfeiting the Securities and current Coin of the United States.”
Eurodollar, Fed and the shadow governments
The counterfeit US dollars circulating abroad are the glue that holds the global “rules-base” order together: they enable the funding needed to bribe foreign officials, pay for and arm the sundry jihadi terror groups and separatist militias, the colossal network of NGOs, charitable organizations and other groups and activities of shadow governments around the world can’t be fully funded through legitimate legal means. These activities often require illegal activities and trillions in embezzled funds.
For example, according to recent reports, billions of dollars have been offered to Iranian officials to sell out and turn Iran over to a government more friendly to the Trump team. In the past, we know that hundreds of millions in US bank notes are routinely smuggled from the Federal Reserve Bank of New York, past the US Comptroller of the Currency, to provide funding for coups, assassinations, regime change operations and similar “special assignments” by the shadow government.
That is why it should be essential for the US Government to regain control of the dollars circulating abroad (or to render those dollars illegitimate and worthless), defunding the “rules-based global order” and reasserting US economic and financial sovereignty. While it would be too optimistic to expect that the Trump administration have pushed the GENIUS Act to achieve any such elevated goals, we should hope that they might leave behind the means needed for the American democracy to reassert its economic and financial sovereignty and turn its currency into a tool to recover its prosperity and economic edge.
In the meantime, tremors
Given that half or more of all US dollars in circulation around the world are outside the United States, the administration’s intended actions (there’ll be ambushes, we’ll find out) will cause major tremors in world markets, driving demand for “legitimate” dollars and rendering the “illegitimate” ones worthless. This will enable Trump and his team to exert pressure on governments around the word and dictate terms at which their dollar balances may be converted into new stablecoins needed for trade settlement and reserve requirements.
I expect that Great Britain, EU and Canada won’t be among the “most favored nations” in the near future, which will further worsen their fiscal positions, make it difficult for them to access global markets and procure commodities like oil, natural gas, wheat and others. This will lead to shortages and exacerbate inflationary pressures at home.
To learn more about TrendCompass reports please check our main TrendCompass web page. We encourage you to also have a read through our TrendCompass User Manual page. For U.S. investors: an investable, fully managed portfolio based on I-System TrendFollowing is available from our partner advisory (more about it here).
Geen opmerkingen:
Een reactie posten