In July 2025, a bill that will rewrite a page of cryptocurrency history passed the U.S. Senate. It is the GENIUS Act (Guardrails Ensuring National Interest, Utility, and Stability Act). On the surface, it seems like a simple regulatory bill, but it is actually a turning point that can shake the very essence of stablecoins, which are called the modern-day 'digital gold standard.' Since President Nixon abolished the gold standard in 1971, the dollar has established itself as a reserve currency without being linked to gold, and we all live in an era where the dollar is gold. However, in 2025, I think this trend is going backwards again. This time, digital assets are replacing the dollar. Stablecoins are playing that role. So why is the US trying to impose strong regulations on stablecoins at this point? I thought that to answer this question, we should first look back at the nature of stablecoins. As of 2025, the global M2 money supply reached $55.48 trillion, the highest ever. Such enormous liquidity naturally gave rise to inflation concerns, and in fact, the dollar index (DXY) fell by 10.8% in the first half of 2025 alone. Meanwhile, the cryptocurrency market acted as a 'digital black hole' that absorbed the overflowing dollars. Tether (USDT) has a market cap of over $143 billion, and USDC is also at $58 billion. Their annual transaction volume is a whopping $27.6 trillion, which is more than the combined transaction volume of Visa and Mastercard. Looking at this data, I thought that stablecoins are more than just a 'convenient payment method'. It is necessary to recognize that they are already part of the global payment infrastructure. Digital Triffin Dilemma: The Contradiction of Stablecoins There is a concept that naturally comes to mind when looking at the situation surrounding stablecoins. It is the 'Triffin Dilemma'. I first heard this concept around 2017, and at the time, I thought it was a bit of an old theory. However, as digital assets began to absorb dollars in earnest, this concept felt valid again. In the 1960s, economist Robert Triffin pointed out the structural contradiction that reserve currency countries face: the incompatible conditions that dollars must be supplied to the world, but at the same time, they must maintain trust and control. Today’s stablecoins can be seen as a digital version of this dilemma, as they require large-scale issuance to provide liquidity, but from the US perspective, they are losing the sovereignty of the dollar. According to the BIS, the amount of “shadow dollars” circulating outside the United States via stablecoins is a whopping $13.2 trillion. This means that dollars are circulating separately in areas outside of direct U.S. control. Key provisions and hidden intentions of the GENIUS Act On the surface, it seems like consumer protection and market health, but I think the core of this bill is to restore control of the dollar. The main provisions make that intention clearer: Restricting stablecoin issuers within the US jurisdiction to banks and state-licensed institutions The issued stablecoins are backed by a 1:1 dollar deposit. Obtaining technical control over foreign-issued stablecoins (freezing, burning, blocking) Ultimately, this could be seen as an attempt to create a ‘digital faucet’ to control the global flow of stablecoins. Realistic Scenario: The Possibility of a Digital Nixon Shock As this bill becomes a reality, I find myself wondering, ‘What would happen if the US really did turn off the stablecoin faucet?’ Technically, major stablecoin issuers already have freeze and burn capabilities. If that happens, Bitcoin, Ethereum, and the entire cryptocurrency market will be greatly shocked by the liquidity shortage. However, from the US perspective, this confusion could be an opportunity. Just as President Nixon established a dollar-centered order by ending the gold standard in 1971, it could be seen as an attempt to reestablish currency hegemony in the digital age. The first time I heard about this story was around 2017~2018. It was right after the ICO craze and the USDT reserve suspicions were also in full swing. At the time, I thought, “Will this really affect the financial system?” But now, looking back, I feel like that question was a very important and realistic concern. Stablecoins have evolved from being mere intermediaries to becoming global liquidity stores As central banks around the world begin to develop CBDCs in earnest, the competition for digital currency hegemony has begun.