Stablecoins are reshaping the global debt landscape, with the GENIUS Act anchoring "Dollar 2.0".

In the traditional financial system, US Treasury bonds have always been the core allocation asset for global Central Banks and sovereign funds. However, this pattern is being disrupted by the Crypto Assets space – the latest data shows that the USD stablecoin issuer Tether (USDT) currently holds more US Treasury bonds than Germany, demonstrating the profound impact of USD stablecoins on the traditional financial system.

1. The US Dollar stablecoin is consuming the position of TradFi

According to the report released by Tether for the first quarter of 2025, its holdings of U.S. Treasury bonds have exceeded $120 billion, surpassing the latest disclosed holdings of $111.4 billion in U.S. debt by Germany. Tether is currently the 19th largest holder of U.S. debt in the world.

As the largest economy in Europe, Germany's core position in the global financial system has always been solid, but this traditional perception is facing new challenges — Tether, as a leading stablecoin issuer with a market capitalization exceeding $100 billion, has substantially influenced the pattern of the US Treasury bond market with its underlying asset allocation strategy. To maintain the 1:1 rigid redemption commitment of USDT to the US dollar, the institution allocates over 90% of its reserves to liquid assets such as short-term US Treasury bonds. This large-scale operation not only consolidates its own market position but has objectively become an important force supporting international demand for US Treasury bonds.

It is worth considering that Tether, as a stable pillar of a "decentralized world," has its reserve system deeply tied to the U.S. debt system. This structure not only provides it with credit endorsement but also exposes its systemic risks: if there is a significant fluctuation in the U.S. Treasury market, will Tether become the first "domino"?

II. Regulatory Framework Accelerates Formation: The GENIUS Act Reshapes the Industry Landscape

In the face of the rapid expansion of stablecoins, U.S. Senator Bill Hagerty's GENIUS Act proposed in February 2025 has entered the legislative fast track. On May 20, 2025, the bill completed procedural voting in the Senate, passing with a vote of 66 to 32.

This landmark bill contains three major regulatory dimensions:

1. Market Access and Operational Standards

Implement a tiered licensing system (10 billion USD as the federal/state regulatory boundary)

Limited reserve asset types (cash only, short-term debt within 93 days, money market funds, and repurchase agreements)

Prohibit tech giants from independently issuing stablecoins

2. Risk Control System

Mandatory Monthly Audits and Information Disclosure

Establish a user fund bankruptcy isolation mechanism

Granting FinCEN (Financial Crimes Enforcement Network) new regulatory authority over DeFi tools

3. Avoidance of Conflicts of Interest

Prohibit current high-ranking officials from participating in stablecoin projects.

Prohibit interest-bearing stablecoin

3. A new monetary order is brewing

With the official passage of the GENIUS Act, the U.S. government's strategic positioning on stablecoins has shifted from "risk prevention" to "regulatory acceptance." Stablecoins are no longer an external technological experiment but are becoming part of the dollar system.

This change is reshaping the holding structure of global USD assets. From sovereign countries like Japan and China, to offshore financial centers like the Cayman Islands and Luxembourg, and to global technology institutions like Tether and Circle, the buyer base for US Treasuries is undergoing profound changes. Stablecoin issuance institutions support the value of their coins through US Treasuries, and objectively, they have also become a new channel for the "export of USD."

It can be said that a "Dollar 2.0" system is taking shape. It is both compliant and cross-border; both decentralized and reliant on core assets; superficially a decentralized network architecture, but in reality forming new centralized powers in the market. This new order, driven by private institutions, accommodated by policy, and centered on asset binding, is becoming the prototype of the next round of the global financial system.

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