Countries around the world have realised that the dollar is not such a nice thing to have. Hardly a good store for wealth.
So they have diversied over the past year into a basket of currencies other than USD, into gold, and so on.
This spells trouble for the USA as it has to keep on issuing more bonds every year to finance its free lunch. A country which decides to moderately shift its exposure will drastically drop its fresh purchases of the dollar, even if it refrains from selling the bonds to protect its own investment.
So to whom does the US palm off its snake oil i.e. its greenback currency?
Trump stumbled on an idea. He brought the Genius Bill. This bill focuses on stablecoins, setting up regulatory guidelines for this form of digital currency across the United States. It gives legitimacy to stablecoins and effectively puts them on a perch as a legitimate safe currency to deal in. Provided, there is a provided of course, the stable currency issuer should back it with equal amount of USD or Treasury Bonds purchased. Thus just like earlier USD had a currency backed by gold, now we have a currency (or will have), in the form of stable coins of myriad hues, which are backed by the USD.
Thus as the world moves to stable coin, the US is guaranteed a huge stash of its IOU’s in perpetual dead stock, being used just as a counter weight to the stable coins issued.
Buy prey, who will buy a stable coin, when I can very well buy a USD for the same money? Answer is simple – drug lords, money laundering operations, illicit money generators etc. For the difference between USD and stable coin worth one USD is that the USD can generate interest. The stable coin sits like a dead duck.