This article appears in the July 18, 2025 issue of Executive Intelligence Review.
“If we lose the dollar standard—global dollar standard we have now, it will be like losing a war, losing a world war,” United States President Donald Trump announced to reporters at a July 8 Oval Office press conference.
Why, then, is the President urging on the creation of scores of other, privately branded dollars—so-called stablecoins, which are ersatz U.S. dollars issued by private tech and financial companies like Tether, Inc. and private banks like Bank of America? Is the need for trillions in new dollar printings to buy the unrolling new trillions in U.S. Federal debt, so desperate as to invite currency chaos like that of the 1850s? There was no dollar standard then, not worldwide, and not in the United States.
The U.S. dollar’s value has dropped by 10% against other major currencies in the first half of 2025, the fastest six-month fall by the dollar since 1973 when the Bretton Woods gold-reserve system was being wrecked. President Trump’s advisors are said to want this dollar devaluation, to stimulate American manufacturing. But U.S. manufacturing employment keeps drifting steadily downward, as it has for more than a year, and continuing through the report for June 2025.
Instead of threatening the BRICS nations as if they wanted to bring down the dollar, why isn’t the Trump Administration defending the dollar standard—against Wall Street and London debt speculation and war profiteering, and against cryptocurrency?
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In his second term in the White House, President Donald Trump is so teamed up with fellow multi-billionaires as to suggest calling his government a plutocracy, which confuses “the great and the beautiful” with “the rich”. His Secretaries of Commerce, Treasury and Education are multibillionaires; he takes close counsel of others similarly wealthy, including war negotiator Steve Witkoff, “Crypto-Currency Czar” David Sacks, Vice President Vance’s Mephistopheles Peter Thiel, and—for eight months—Trump’s personal Ariel in the tempest, Elon Musk.
Except for extending and intensifying his first-term fiscal policy—the tariffs and the Big, Beautiful Bill—the President has abandoned the signature policies Trump ’45 stood for. He no longer speaks about new economic infrastructure; he’s drastically slashing the budget of the space agency, which he previously resuscitated and set on the Artemis mission to the Moon and Mars; he now plays the dangerous game of regime-change wars and war threats, which he vowed to end.
And the President’s completely new and unexpected policy focus, is pushing cryptocurrency, including what are called “stablecoins”, which are 250 billion ersatz U.S. dollars issued by about 20 private companies, thus far. It is a fundamental threat to the U.S. Treasury market—the world’s largest financial market—and to two and a half centuries of full faith and credit of America’s Federal debts.
It’s bad enough to encourage the appearance of scores or hundreds of private electronic tokens, all claiming to be “U.S. dollar currencies” for purposes of purchasing goods and services. It’s far more dangerous to the Treasury and the global financial system, to authorize these private, so-called “stablecoins” as the new global source of demand for U.S. Treasury debt, as it balloons through an unrepayable $40 trillion and toward $50 trillion in a decade.
But in the words of Trump’s multi-billionaires team, as well as congressional co-thinkers, “driving the demand for Treasuries” is the policy—using private banks’ and companies’ printing of “dollars”; i.e., private quantitative easing (“QE”). The “stablecoin issuers” are supposed to push the ersatz-dollar tokens all over the world, and use the real yen, or naira, lira, etc., which they’re paid for these “stablecoins”, to buy Treasury bills—for assets, or collateral speculation.
This, vacuuming the world to buy into the U.S. Treasury debt bubble, is the purpose of the GENIUS Act already passed the Senate and set to pass the House, and the dubious leader in issuing these private “dollars” is El Salvador-based Tether, Inc. The underlying assumption that “stablecoin” tokens are always worth one U.S. dollar, is belied by Tether’s own history.
The Problem with Tether, Inc.
Tether, Inc. in 2024 made reported profits of $13 billion, on $134 billion in assets, with just 100 employees [!], according to an insightful assessment of “The Stablecoin Time Bomb” by former Greek Economics Minister Yanis Varoufakis, published in UnHerd June 25. Tether’s assets have grown further in 2025 and allegedly represent more than 60% of all “stablecoin” assets worldwide.
Commerce Secretary Howard Lutnick’s Wall Street investment bank, Cantor Fitzgerald, is largely responsible for this performance. A Bloomberg News analysis in January reported that Cantor Fitzgerald took over Tether’s management in 2021, when Tether was stateless (headquartered nowhere, banking in the Bahamas), and after it had paid several fines to regulators. Lutnick’s investment firm then purportedly got rid of the risky commercial paper Tether was using to back up its “dollars”, and has management of Tether’s entire holdings of U.S. Treasury securities—of which Cantor Fitzgerald is one of 18 “primary dealer” banks in the world. Thus, Lutnick’s investment bank really makes Tether’s profits; it owns a 5% chunk of Tether acquired in 2021; and Lutnick appears to have “sold” candidate Donald Trump in 2024 on the argument that cryptocurrencies will “drive the demand for Treasuries worldwide” and “ensure dollar dominance indefinitely”.
According to a report in in May, Tether and its crypto exchange Bitfinex have been investigated many times by American regulatory authorities. In 2021 Tether and Bitfinex had to pay a $42 million fine to the Commodity Futures Trading Commission, and another of $18.5 million to the New York Attorney General, for misrepresenting that Tether had enough U.S. dollar reserves (Treasuries) in its banks in the Bahamas, to back up Tethercoins, its ersatz-dollar tokens. Both regulators also charged that Tether commingled funds of customers buying stablecoins, with those of the Bitfinex crypto exchange, echoing the case of FTX and its imprisoned CEO, Sam Bankman-Fried.
The Guardian report notes that Tether’s Bahama bankers then (in 2022) gave up, and Tether, Inc.’s investment management was taken over by Cantor Fitzgerald on the personal initiative of current Commerce Secretary Lutnick.
In January 2025, Tether, Inc. relocated to El Salvador, where it is completely unregulated and untaxed; its U.S. Treasury bill crypto-assets, managed by Lutnick’s firm, are four times El Salvador’s GDP. Tether withdrew from cryptocurrency operations in the European Union, because the EU had adopted crypto regulation much stricter than the GENIUS Act in the United States.
In February 2025, Lutnick’s Cantor Fitzgerald appeared to “deal in” Rumble, the social media video company which partners in advertising with Trump’s Truth Social, and which is invested in and features senior Trump Administration figures and Donald Trump, Jr. Rumble was started in 2021 by Peter Thiel’s and Vice President J.D. Vance’s venture capital firm, Narya Capital.
In the February deal, Cantor Fitzgerald invested $775 million (either from its own or Tether, Inc.’s funds) into Rumble, four times that money-losing video company’s assets.
Some other aspects of President Trump’s sudden cryptocurrency gains in net wealth, estimated at $620 million since taking office in January, have been reported by Bloomberg News.
Economists See Through Stablecoins Pitch
There are many, many warnings from economics officials and competent economists. Arthur Wilmarth, a respected senior banking expert of George Washington University, has urged, in long warning papers, that stablecoins only be permitted issuance—if at all—by federally regulated and insured U.S.-based commercial banks. Former Economics Minister Varoufakis, in characterizing stablecoins as a “time bomb in the financial system”, describes a number of major economic threats. Two are: the deflationary “migration of deposits out of U.S. domestic bank accounts to stablecoins,” to the eventual extent of $6.6 trillion forecast by the Treasury itself; and a “doom loop” between cryptocurrencies and banks.
The migration of deposits will make short-term Treasury bill rates fall, while longer-term Treasury note and bond rates rise. The pull of large new demand for Treasury debt securities will pull these deposits out of banks, pull investment from the rest of the economy, and cause the banks’ own interest rates on both CDs and loans to rise. The “doom loop” was graphically shown in March 2023 when Silicon Valley Bank’s failure caused a run on the second-largest stablecoin, called Circle, breaking its peg to the dollar. In turn, a serious “run” on a stablecoin issuer—of which there would soon be many, under very “light-touch” regulation and reserve auditing under the Congressional GENIUS Act—can destabilize the entire Treasury debt market.
Varoufakis accurately calls the stablecoin policy “outsourcing dollar dominance to [private] tech lords.”
Economic historian Dr. Barry Eichengreen, of the National Bureau of Economic Research, wrote in the New York Times June 17, what other economists have warned of as well: Stablecoins echo the 19th-Century wildcat banking era, with no national currency. In “The GENIUS Act Will Bring Economic Chaos”, Eichengreen wrote:
The Genius Act would give hundreds—perhaps even thousands—of American companies the ability to issue their own currencies…. America had a similar banking system more than 150 years ago, and it unleashed chaos and financial ruin.
More precisely, in the decades after 1837, when President Andrew Jackson shut down the nation’s Second National Bank:
Similar to what is being proposed by the Genius Act, every bank was entitled to issue its own dollars as long as it held $1 of collateral for every $1 issued…. Those assets were sometimes all but worthless—resulting in panics and bank runs.
There was no uniform national currency in those decades; even where the state bank “dollars” did not collapse, they all traded at different values. That, Eichengreen added, will be much harder on economic activity today, than it was in the 1840s and 1850s. And when today’s “stablecoins” are hit with runs and fail, their issuers will rapidly have to sell off those Treasury bills they hold as collateral:
Treasury prices could collapse, sharply increasing interest rates and destabilizing other financial markets and our entire economy.
Regulators: Stablecoins Are Not Sound Money
The Basel-based Bank for International Settlements (BIS) on June 24 issued a chapter of its annual report early, to give a stark warning that
Stablecoins as a form of sound money fall short, and without regulation, pose a risk to financial stability and monetary sovereignty.
The head of the BIS Monetary and Economic Department, Shin Hyun Song, explained that stablecoins lack the settlement function provided by a national bank with fiat money. Shin wrote:
Stablecoin holdings are tagged with the name of the issuer, much like private banknotes circulating in the 19th-Century Free Banking era in the United States.
As such, stablecoins often trade at varying exchange rates depending on the issuer, undermining “singleness”, and the no-questions-asked principle of central bank-issued money. “Singleness is either you have it or you don’t,” Shin said, also warning of the risk of “fire sales” of the assets backing stablecoins if they collapse, as TerraUSD (UST) and the cryptocurrency LUNA did in 2022.
Stablecoin issuers fear even soft regulations, such as the European Union MiCAR guideline. Tether, which currently has nearly two-thirds of the overall stablecoin market, quit the EU following the introduction of MiCAR. BIS Deputy General Manager Andréa Maechler commented,
You will always have the question about the quality of the asset backing [for the token—ed.]. Is the money really there? Where is it?
Another senior regulator, economist, and former banker, the just-retired head of Italy’s CONSOB stock markets authority, Prof. Paolo Savona, told EIR that cryptocurrencies, including stablecoins, create problems for monetary and financial stability. This is primarily because they are created (or “mined”) by private individuals on computers, while all other currency assets are issued with [national—ed.] authorization, and therefore have a known and supervised debtor ready to redeem them.
Savona judged that “Cryptocurrencies and crypto-assets create a market environment conducive to a systemic crisis,” similar to that caused by the growth of complex derivatives in 2008. (A summary of Professor Savona’s interview follows this article.)
Repeating the Clinton Mistake on Derivatives
In American Banker on June 2, a well-known economist—Simon Johnson of MIT and formerly IMF chief economist—joined a famous U.S. regulator, former CFTC chair Brooksley Born, to expose the woeful lack of regulation of stablecoins and their issuers which is embodied in the Senate’s GENIUS Act and its House counterpart. They compare it to the disastrous Commodity Futures Modernization Act of 2000. Born resigned in protest after fighting to prevent that Act, which prohibited CFTC from regulating financial derivatives. It led to the global explosion of derivatives to a nearly 1,000-trillion-dollar “financial weapon of mass destruction” by the time of the 2008 global financial crash.
Johnson and Born directly echo the question to the Trump Administration, with which this article began:
If the goals for this bill [the GENIUS Act—ed.] supposedly include preserving the U.S. dollar as the world’s reserve currency, and boosting demand for Treasuries (as stated by its advocates), why allow foreign issuers whose stablecoins are permitted in the U.S., to invest their reserves in other assets, which for that matter, could include their own country’s (risky) government debt? Foreign regulators might condone or even favor such an arrangement.
It is shocking that a stablecoin issuer with up to $50 billion in assets (half the assets of the banks that failed in the March 2023 crisis) does not need an audited financial statement on its reserves under GENIUS Act “regulation”. And if its assets are below $10 billion, it will not be regulated federally at all, but by its home state—and it can then operate in other states without authorization by its home state. Thus today, only one U.S.-based stablecoin issuer, Circle—the one that needed Silicon Valley Bank to be bailed out—would be regulated at all by U.S. legislative authority!
Tether, Inc., the biggest stablecoin issuer, is unregulated where it is domiciled, in El Salvador, and could also “evade the bill while still accessing U.S. markets through decentralized exchanges.” Tether, in eight years’ operation, has never provided an audited statement of its reserves.
London Sees Stablecoins Repeating its ‘Eurodollar’ Empire
The London-based cryptocurrency exchange Ripple held a “UK Crypto Policy Summit” on June 18, featuring government presentations led by the Chancellor of The Exchequer, and after the British Treasury published its CryptoAssets Order on April 29. UK authorities are playing the U.S. Administration’s cryptocurrency game, focusing on U.S. dollar stablecoins, and planning to play it better: The headline of Ripple’s June 20 release on the summit was “Ripple thinks London can become the main crypto powerhouse in the West.”
The British intend to build a new dollar stablecoin empire modeled on the Eurodollar market London created from the 1950s and 1960s, to the point that in 1978 it was reported that more than 80% of all U.S. dollar currency printed, was created in London or “London offshore” tax havens like the Cayman Islands, Hong Kong, Bermuda, the Jersey Islands, Luxembourg, etc. By the 1970s, the U.S. dollar had been made the London dollar, and Franklin Delano Roosevelt’s Bretton Woods gold-reserve monetary system had been pulled down.
The Ripple release reported:
One of Ripple’s most pointed recommendations is to codify the UK’s emerging openness to overseas stablecoins like USDC and USDT [the dollar stablecoins issued by Circle and Tether respectively—ed.]. This would position London in direct contrast to the EU’s MiCA framework, which limits circulation to locally issued assets.
According to policy materials shared at the summit, embracing foreign-based coins would give the UK a post-Brexit edge and recreate the kind of offshore liquidity markets seen in the Eurodollar boom of the 1950s.
Losing control of the dollar to a “Tetherdollar market” or hundreds of other “stable-dollar markets”, is repeating the inflationary folly of the inflationary Eurodollar and “petrodollar” markets which, by the 1970s, destroyed the Bretton Woods dollar-reserve system.
The increasingly short-term and shaky U.S. Federal debt bubble must actually be reduced relative to the American productive economy and its productivity. Industrial productivity growth must be restored and accelerated.
The pathway to that result begins by re-enacting and enforcing the Glass-Steagall Act, so that the great mass of commercial bank deposits go to lending, not financial derivatives and speculation. That pathway continues by nationalizing the Federal Reserve to create a National Bank lending for infrastructure and manufacturing, capitalizing it by orderly conversions of Treasury debt to equity in that Bank.
