Bi-Weekly Geopolitical Report – The Geopolitics of US Dollar Stablecoins (March 9, 2026)
by Bill O’Grady | PDF
The expansion and regulation of stablecoins have become major policy goals of the Trump administration. This form of cryptocurrency has the potential to dramatically improve the transfer of funds between economic entities and could be a new source of demand for US Treasurys. In this report, we will define what stablecoins are and then examine the evolving regulatory framework, how the emerging stablecoin market relates to monetary and geopolitical history, and the ways in which stablecoins could become a tool of geopolitical power for the US. As always, we will conclude with market ramifications.
What Are Stablecoins?
Cryptocurrencies are currency-like assets that are transferred on permissionless blockchains. This means that a public ledger exists (the blockchain) where a buyer and a seller of a particular cryptocurrency can engineer a transfer without using an existing banking system. Stablecoins are a type of cryptocurrency designed to hold a stable asset value relative to a fiat currency.[1] They differ from Bitcoin, Ethereum, or other cryptocurrencies, as these are not usually tied to any particular asset and thus their prices often fluctuate wildly. The initial use case for stablecoins was to offer holders of traditional cryptocurrencies an “off-ramp” from their cryptocurrency holdings.