Why is the expansion of USDC beneficial for the American debt? Is it even a necessary path? (Simplified version)
In essence: USDC = the United States outsources the "minting power" of the dollar system to the global market, allowing the world to voluntarily help it bear the demand for dollars, thereby prolonging the dollar hegemony and debt cycle.
1) USDC = Uncollateralized US Dollar demand machine
As long as the world is willing to hold USDC, there will be buyers for U.S. Treasury bonds.
Because for every 1 USD of USDC issued, an asset worth 1 USD (usually US Treasuries or short-term debt) will be purchased. This is equivalent to the global backing of America's debt. The more the world wants USDC → the more the United States can sell bonds.
2) USDC expands the dollar system from "banks" to "crypto networks"
Traditional dollar expansion relies on:
banking system
SWIFT
Federal Reserve repurchase
International Trade Settlement
There is now a brand new channel: native demand for cryptocurrency. A channel that is extremely low-cost, very fast, and has very high coverage for the United States. This is the "second ledger of the internet" for USD.
3) Stablecoins are the "passive buying machine" for US Treasuries.
The reserve structure of USDC is almost:
80–90% T-bills
Ultra High Liquidity with Extremely Short Duration
Every time USDC increases by 10 billion in market value, the United States automatically gains a buyer for 10 billion in government bonds.
This is the "ruthless, unrestricted, and politically unimpeded" buyer that the American debt market needs the most.
4) The scale of US debt is too large to be absorbed without relying on cryptocurrency.
United States now:
The growth rate of debt far exceeds the growth rate of GDP.
Traditional buyers (Japan, China, pension funds) have limited incremental growth.
De-globalization is causing a contraction in external demand.
In a stable state, the United States needs new super buyers.
USDC + stablecoins, is the new "debt black hole" found by the United States.
It absorbs global trading demand, cross-border capital, gaming assets, and cryptocurrency trading users, all of which are funds originally unrelated to the US dollar system, and they are all converted into US Treasury bonds.
5) Regulatory Logic: The United States is not cracking down on stablecoins, but rather screening for "stablecoins that can help it reduce debt."
USDT is not backed by the US → Untrusted by the system
USDC is fully within the U.S. financial system → a compliant "dollar outpost"
The future stablecoin legislation is also aimed at: incorporating stablecoins into the US debt cycle, making it the next lifeline of the US Treasury issuance system.
In other words, the United States wants to "support USDC" rather than stablecoins.
6) The future of the dollar: print, but not directly, rather it is "market self-printing".
Past:
The Federal Reserve prints USD → Issues government bonds → Global purchase
The Future (Stablecoin Era):
Global user demand USDC → Circle (or bank) buys government bonds → The Federal Reserve doesn't need to print personally
This is the most popular structure in the United States: Others help it print → Others help it buy debt → Others help it maintain the US dollar hegemony.
Stablecoins are the "safety valve" for the US in the next round of debt crisis. The expansion of USDC is not an option; it is a necessary condition for the continued operation of the US debt system.
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Why is the expansion of USDC beneficial for the American debt? Is it even a necessary path? (Simplified version)
In essence: USDC = the United States outsources the "minting power" of the dollar system to the global market, allowing the world to voluntarily help it bear the demand for dollars, thereby prolonging the dollar hegemony and debt cycle.
1) USDC = Uncollateralized US Dollar demand machine
As long as the world is willing to hold USDC, there will be buyers for U.S. Treasury bonds.
Because for every 1 USD of USDC issued, an asset worth 1 USD (usually US Treasuries or short-term debt) will be purchased.
This is equivalent to the global backing of America's debt.
The more the world wants USDC → the more the United States can sell bonds.
2) USDC expands the dollar system from "banks" to "crypto networks"
Traditional dollar expansion relies on:
banking system
SWIFT
Federal Reserve repurchase
International Trade Settlement
There is now a brand new channel: native demand for cryptocurrency.
A channel that is extremely low-cost, very fast, and has very high coverage for the United States.
This is the "second ledger of the internet" for USD.
3) Stablecoins are the "passive buying machine" for US Treasuries.
The reserve structure of USDC is almost:
80–90% T-bills
Ultra High Liquidity with Extremely Short Duration
Every time USDC increases by 10 billion in market value, the United States automatically gains a buyer for 10 billion in government bonds.
This is the "ruthless, unrestricted, and politically unimpeded" buyer that the American debt market needs the most.
4) The scale of US debt is too large to be absorbed without relying on cryptocurrency.
United States now:
The growth rate of debt far exceeds the growth rate of GDP.
Traditional buyers (Japan, China, pension funds) have limited incremental growth.
De-globalization is causing a contraction in external demand.
In a stable state, the United States needs new super buyers.
USDC + stablecoins, is the new "debt black hole" found by the United States.
It absorbs global trading demand, cross-border capital, gaming assets, and cryptocurrency trading users, all of which are funds originally unrelated to the US dollar system, and they are all converted into US Treasury bonds.
5) Regulatory Logic: The United States is not cracking down on stablecoins, but rather screening for "stablecoins that can help it reduce debt."
USDT is not backed by the US → Untrusted by the system
USDC is fully within the U.S. financial system → a compliant "dollar outpost"
The future stablecoin legislation is also aimed at: incorporating stablecoins into the US debt cycle, making it the next lifeline of the US Treasury issuance system.
In other words, the United States wants to "support USDC" rather than stablecoins.
6) The future of the dollar: print, but not directly, rather it is "market self-printing".
Past:
The Federal Reserve prints USD → Issues government bonds → Global purchase
The Future (Stablecoin Era):
Global user demand USDC → Circle (or bank) buys government bonds → The Federal Reserve doesn't need to print personally
This is the most popular structure in the United States:
Others help it print → Others help it buy debt → Others help it maintain the US dollar hegemony.
Stablecoins are the "safety valve" for the US in the next round of debt crisis.
The expansion of USDC is not an option; it is a necessary condition for the continued operation of the US debt system.