《Wen Hongjun’s Stablecoin New Finance-19》A Joint Statement by the US and the UK! The Digital Return of European Dollar 2.0

The “offshore USD” in the joint statement by the United States and the United Kingdom is actually hiding a financial “massacre weapon”! Stablecoins are set to become the strongest vehicle for Eurodollar in Europe. Insiders look at the background and the details—Financial News Flash Star teaches you which key points you should understand.

(Recap:《温宏駿稳定币新金融-18》OUSD free competition vs bank deposit tokens sticking to the money’s original basis—new and old forces fully launch a comprehensive war)

(Background supplement:《温宏駿稳定币新金融-17》Is the market-share battle coming? The ultimate settlement sovereignty showdown between new and old forces)

Table of Contents

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• 1、To understand this document, you need to go back to London in 1957
• 2、In the ten-point statement, the real killer clause is Clause 5
• 3、The UK’s role: it’s not Europe’s ally—it’s a European “super node” for the dollar 🔥
• 4、Different “key differences” from 1970: back then it was credit dollars; this time it’s cash dollars (stablecoins are digital cash at a 1:1 ratio)
• ✅Financial News Flash Star’s one-sentence summary

What is Eurodollar 2.0? The US-UK joint statement writes “offshore dollars” as official specification—what grew by tacit approval in 1957 becomes a product of institutional export in 2026.

On July 14, the UK Treasury released a《US-UK Stablecoin Joint Statement》. Ten clauses, an official-looking layout—mainstream business media seems to have little voice so far.

For ordinary people, it looks like a boring diplomatic document. But in Financial News Flash Star’s eyes, this is the specification book for the 1970s “Eurodollar”—which, after half a century, has been rewritten by two governments themselves! Only this time, it’s no longer a wild market born from regulatory arbitrage, but an official制度 written in black and white.

1、To understand this document, you need to go back to London in 1957

Let’s start with history. After World War II, Europe was in ruins and urgently needed rebuilding. Europe’s recovery depended on huge amounts of dollar support—Europe ran surpluses and earned foreign exchange. At this time, dollars flowed out of the United States: the Soviet Union didn’t dare park dollars in New York for fear of being frozen; dollars held by European traders had nowhere to go.

London bankers found something: if dollar deposits were held “in London,” they were not subject to US Regulation Q’s 🏴 interest rate caps, and they didn’t have to set aside US reserves.

The Bank of England turns a blind eye and keeps the other eye half-open—so a massive pool of funds “not within the US territory, not subject to US regulation, yet denominated in dollars” was born in London. This is Eurodollar—aka offshore dollars. Doesn’t it sound exactly like Financial News Flash Star’s catchphrase: stablecoins are “a nuclear weapon with no borders, no license, and skipping national sovereignty!”

🔰 The key to this powerful weapon lies in the tacit agreement of three parties:

• The US tacitly allows it, because it turns the dollar into the world’s currency—outsourcing hegemony, externalizing costs;
• The UK provides the jurisdiction—swapping into the revival of the City of London;
• The fund pool itself is “not ring-fenced”—dollars can be allocated globally without any country being able to say, “Keep the money here.”

⌛️Remember the four words “not ring-fenced”—we’ll bring it up again later.

2、In the ten-point statement, the real killer clause is Clause 5

Clause 4 talks about a 1:1 reserve of high-quality liquid assets in full—this is the existing specification of the GENIUS Act, not much new. But the real firepower is hidden in Clause 5:

✅ The two governments explicitly commit to avoid requiring issuers to ring-fence “inappropriately high water-mark resources” in their own jurisdictions, and they directly say that such requirements would “fragment the stablecoin arrangements, reduce operational efficiency, harm financial stability and innovation.”

Look at it—who is this aimed at? We discussed it in the previous installment—EU MiCA requires non-bank stablecoin issuers to deposit 30% to 60% of customers’ funds into commercial banks within the EU. That’s “reserve localization,” that’s “ring-fencing.”

What the US and the UK jointly declare is the opposite worldview: the reserve pool of stablecoins is a single global, substitutable one global fungible pool—reserves remain in the US Treasuries market, tokens circulate worldwide, and no jurisdiction may split the pool into one-country parts. (And here’s 😌, that’s how Trump is—bold and霸气.)

This is the core specification of the London dollar pool in 1957—only then it relied on the Bank of England’s tacit approval; today it relies on the signatures of the two countries’ Treasuries.

3、The UK’s role: it’s not Europe’s ally—it’s a European “super node” for the dollar 🔥

Reading this, someone will definitely ask: isn’t the UK part of Europe? Doesn’t this statement mean the UK helps Europe align with the US?

Sorry, it’s exactly the opposite. What the UK supports is not the EU, but a beachhead in Europe’s time zone for the dollar system—same as the role in 1957.

Let’s look at the structure of this deal:

• The US ships the currency: GENIUS Act governs issuance domestically, with reserves anchored to US Treasuries—dollar credit is the product itself;
• The UK ships jurisdiction: Clause 10 states that both sides will establish formal mechanisms so that stablecoins issued by one side can enter the other side’s market—this is an early form of mutual recognition, with London once again becoming an offshore exchange for dollar assets 🔥;
• Trapped by two-sided pressure is the EU: MiCA’s localization requirements instantly turn it into a strange outlier across the Atlantic—one that is the only side insisting on “fragmenting the reserves.”

The three-pole map from the last episode needs updating: the US at the market-management level digs out Europe’s largest financial center directly. The continent makes a banker club; the US and the UK make a dollar market spanning the Atlantic.

4、Different “key differences” from 1970: back then it was credit dollars; this time it’s cash dollars (stablecoins are digital cash at a 1:1 ratio)

Pay attention to this difference—it may be more important than the similarities.

Eurodollar is a partially reserved currency: once London banks take in dollar deposits, they can lend them out; the offshore dollar pool self-expands, creating credit. This is the engine behind its explosive growth—and also the root cause of all later offshore dollar crises.

✅ But this time, stablecoins are narrow bank money with full reserves: 1:1 locked, not lent out, cannot pay interest, and does no maturity transformation. The geographic structure clones Eurodollar (offshore circulation, not ring-fenced, London as the node), but the monetary nature is exactly the opposite—back then it was offshore “credit dollars”; now it’s offshore “cash dollars.”

So the question is: if the credit creation function is squeezed out by the narrow bank, who will fill the role?

The answer is something we’ve discussed in this stablecoin series—once maturity transformation is pushed outside the banking system, tokenized RWA and on-chain credit markets will take over the demand. Clause 7 actually already reserves the interface: the two countries endorse “stablecoins” as settlement tools for securities and commodities markets 🔥 (here we hope the Taiwan central bank and FSC are watching 👀—Financial News Flash Star brought it up 100 times 🫠), and they ensure issuers can fairly obtain banking services. Clause 9 further gives holders a priority claim on reserves in the event of issuer bankruptcy—this is a legal foundation that Eurodollars in the 1970s never had.

Back then, offshore dollars built a building on a legal vacuum; this time, they lay the foundation first and then build the building.

✅ Financial News Flash Star’s one-sentence summary

In 1970, Eurodollars were a barbaric-growth market born from regulatory arbitrage, and the US “tacitly allowed” it to exist. In 2026, the US-UK statement turns the same geographic structure into an official specification book—the US transforms it into an “exportable institution.” Look at Asian countries outside the euro area—will they follow? (Remember Financial News Flash Star mentioned Taiwan’s stablecoin strategy N times: “dollar +1”? 😌)

In the second half of currency hegemony, what’s exported isn’t only the dollar, but the rules and institutions themselves. Every stop of rules export expands the dollar tax base.

London’s never-sleeping financial center has already re-boarded. The next key question is: should Asia’s financial centers (Hong Kong is a bit awkward) be the London of 1957, or keep being an observer?