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- 🇺🇸 Stablecoins and the American Techno-economic Conquest of the 21st Century
🇺🇸 Stablecoins and the American Techno-economic Conquest of the 21st Century
Part 1 of 2: A planetary-scale financial colonization
Frontera Bando, Joker & Abraham Cobos
August 01, 2025
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And don't miss this week's guest podcast with Jack Chong from the Checker to explore how they’re fixing stablecoin liquidity.
This Edition is Presented by Bitso’s Stablecoin Conference
Frontera is an official media partner of Bitso’s Stablecoin Conference 2025.
We’ll be on the ground in Mexico City this August 27–28, covering the builders and ideas reshaping LatAm’s financial future.
Use the code FRONTERA10 for 10% off your ticket here.
🏰 A New Empire Built on Stablecoins
In the 16th century, conquest rode the wind on sails of empire.
In the 19th, it thundered in on rails and rifles.
In the 20th, it flowed with oil and flew from distant airbases.
Now, on the 21st, it spreads silently as code, through the digital, crypto-native assets we know today as stablecoins.
Stablecoins, digital tokens pegged to fiat currencies, have outgrown their role as mere payment tools and evolved into instruments of power.
Backed 1:1 by short-term U.S. Treasuries and powered by blockchain rails, these dollar-backed coins are frictionless, borderless, and increasingly everywhere, bridging crypto and traditional finance like no other asset can.
Their true purpose, however, lies deeper. They allow the United States to export its debt, reinforce dollar hegemony, and quietly colonize emerging markets.
It’s the most elegant form of financial imperialism in modern history. A techno-economic conquest so important that future generations will study for years to come.
What follows is a two part story of how America is weaponizing digital dollars, and the critical choices emerging economies must now make.
⛈️ The Coming Economic Storm
We're not diving into stablecoins just yet, first, you need to understand how we got there.
Storm clouds are gathering over the U.S. economy.
In April 2025, Trump unveiled sweeping tariffs: 10% on most global imports, 25% on non-USMCA-compliant goods from Mexico and Canada, and a headline-grabbing 145% (dropped to 55%) on key Chinese products.
Branded as “Liberation Day” measures, these policies aim to protect domestic manufacturing. But protectionism has a price: inflation.
Tariffs are taxes in disguise. They push up the cost of imported goods, and those costs ripple across supply chains. From raw materials to electronics, American companies are passing the burden to buyers.
The result is already visible. In May 2025, the U.S. Treasury collected $23B in tariffs, nearly 4x more than the same month last year.
As prices rise, households cut back and demand softens. That’s where the real danger lies, in a tariff-driven inflation shock triggering a recession. Sensing the risk, the Fed has pivoted.
Powell paused rate hikes and policymakers now project two rate cuts before year-end, not because inflation is falling, but because growth is faltering.
What’s taking shape is a stagflation-lite environment: rising prices, weakening demand, and a central bank under political pressure to ease.
With fewer tools left at home, the U.S. will need to look outward to sustain its financial dominance.
I wonder how?
🏦 America’s Refinancing Problem
But take it easy, we're not at digital dollars yet.
While headlines focus on tariffs and inflation, another silent crisis is unfolding beneath the surface: the U.S. must refinance $9.2T of its debt in 2025 alone.
Yeah, you read that right. That’s nearly a quarter of all outstanding Treasuries, and most of it matures in the first half of the year.
Historically, U.S. investors have absorbed most of this debt, whether through 401(k)s or passive ETFs, a quiet, patriotic trade that’s been one of the worst-performing in modern history. Today, American holders sit on $19.7T in Treasuries, or 55% of all debt.
For decades, this system ran on habit: the Treasury issued new debt to pay off the old, set its own interest rate, and trusted the market to show up. The lower the rate, the cheaper the refinancing, but also the weaker the demand, as investors chased yield elsewhere.
China, Japan and Canada now hold just 6% of U.S. debt, down from 23% a decade ago. The Fed is off the table. And the usual buyers are already walking away.
To avoid default, the U.S. needs to sell trillions in bonds at the lowest yields in history, to buyers that no longer exist.
Unless, of course, it finds a new global distribution channel.
One that doesn’t look like a bond market at all.
🏇 Stablecoins as a Trojan Horse for Debt Export
One that looks like money.
One that feels like innovation.
One that quietly refinances the American empire.
Stablecoins are the new, much needed, distribution channel.
They're essentially an elegant way to repackage U.S. debt and export it.
To the average user, a stablecoin is digital cash: fast, global, and pegged to the world’s most powerful currency. But each token minted is backed by short-term U.S. Treasuries, meaning every stablecoin circulating abroad quietly embeds a sliver of American debt into foreign economies.
When someone in Buenos Aires or Bogotá buys USDC, they’re unknowingly buying into the U.S. bond market. They don't care, and they won't, because they'll trade the burden of their failing currency for stability any day of the week. And for the first time, it's just a few taps away.
It's simple, honestly, people just want dollars. The brilliance lies in the disguise, and the voluntary demand does the rest.
The model was just supercharged by the GENIUS Act. Signed into law in July 2025, it set clear rules for stablecoin issuers, and made U.S. Treasuries the default reserve asset, formalizing a pipeline that turns global dollar demand into fresh financing for America’s debt.
Trump hailed stablecoins as “internet money” that would cement U.S. power.
David Sacks called them a “strategic lever” to drive trillions into Treasuries.
Scott Bessent urged lawmakers to see them for what they are: a 21st-century tool to fund America’s deficits.
Private stablecoin issuers essentially become intermediaries funneling global savings into U.S. bonds, while providing users a digital dollar token in return.
It’s a clean, high-tech mechanism for extending America’s economic reach, making stablecoins the Trojan horse carrying U.S. Treasuries into frontier markets.
So yeah, this is how they refinance the empire.
🛫 Infinite Dollar Demand Abroad
The genius of the stablecoin-as-debt-export strategy is that it taps into effectively infinite global demand for dollars.
Around the world, the U.S. dollar is king.
Long before crypto, the Eurodollar market (offshore dollar deposits in foreign banks) grew into a multi-trillion-dollar engine of dollar liquidity outside U.S. borders. Over $13T in U.S. dollar assets circulate abroad in these traditional channels because businesses and savers worldwide trust the dollar more than many local currencies.
Dollarization is a recurring trend in any economy facing instability. What stablecoins do is open a new, direct channel for dollar access that is even more convenient and widespread.
A smartphone and an internet connection is all you need.
In Argentina, triple-digit inflation has driven locals to swap pesos for USDC.
In Nigeria, years of currency devaluation and capital controls have made USDT the go-to unit of account for freelancers and merchants.
Given the choice, people in these countries will pick dollars over their local currencies every time.
The demand is limitless because holding dollars can literally be the difference between survival and financial ruin in unstable economies.
Stablecoins package that security in an even more liquid form, allowing dollars to flow like water through markets where traditional dollar access was once dammed by restrictions and banking friction…
This is the first of a two-part series. Next week, in Part 2, we’ll explore the ultimate implications of these trends: the MAGAfication of the world’s financial systems, and the few options frontier markets have left.
🌐 Frontier Markets Crypto News
🇧🇷 Brazil
Nubank starts testing Nucoin 2.0, a new onchain and untradable version of its crypto rewards program a year after shutting it down.
Brazil’s B3 will extend BTC, ETH, and SOL futures trading from 8 a.m. to 8 p.m. starting October, with plans for 24/7 trading in the future.
🇲🇽 Mexico
Bitso announced a gas-free, onchain trading app with 17,000+ tokens and full self-custody: Bitso Onchain.
🇯🇵 Japan
Japan plans to reclassify crypto as financial products, replacing the current progressive tax of up to 55% with a flat 20% rate.
🇰🇷 South Korea
The Bank of Korea created a Virtual Asset Committee to monitor crypto, and restructured its CBDC teams to focus on digital currency development.
🇭🇰 Hong Kong
HKMA will enforce new stablecoin issuer regulations starting Aug 1, with AML/CTF requirements and a public registry to oversee licensed issuers.
📊 Analytics
Stablecoins processed over $6T in Q1 2025, nearly double Visa’s volume.