The stablecoin, in effect, is becoming the “New Digital Dollar.” That is, a private-sector tokenized liability that is globally liquid and instantly settled yet remains tethered to the sovereign credit of the U.S. government through the Treasury reserve requirement. It’s fiat money on steroids, reinforced by digital demand.
It should also be noted that this “new dollar” is not a Central Bank Digital Currency (CBDC) issued by the Federal Reserve. Instead, it is the private sector’s tokenized, regulated, and dollar-backed stablecoin.
In this scenario, the “old dollar” (physical cash and traditional bank deposits) begins a long, slow decline. Physical currency (cash dollars) will become a niche product, still legal tender but used mostly for small, private, or ceremonial transactions.
At the same time, the vast mountain of old debt (current national debt) doesn’t disappear. Instead, its refinancing and management will become significantly easier. The stablecoin ecosystem will act as a colossal, passive, non-taxpayer funding source for the Treasury, injecting stability and liquidity that reduces political stress around government borrowing.
This digital dollar transition paves the way for the complete tokenization of finance. All assets – stocks, real estate, commodities, and art – will be represented by tokens on a blockchain. Transactions will use stablecoins for instant, 24/7/365 settlement, eliminating the multi-day lag of legacy banking systems. Thus, the world’s finance will move from the slow, segmented rails of the 20th century to the lightning-fast, transparent rails of the 21st.
Of course, this complete digitization of money comes with full system surveillance and tracking. There are some sinister predictions that a person’s spending will be tracked and tied to their social credit score, and even their health metrics.