In 1933, they underestimated the dollar by increasing the legal price of gold and allowing more money to be printed. In 1971, when its reserves could no longer cover the dollars in circulation, it completely abandoned the gold standard. Reserve currency privileges funded the trade deficit by printing dollars and recycling foreign exchange influx to Wall Street. This ultimately sparked the 2008 subprime crisis, burning Europe for ten years.
The essence of American financial power is summarised in the phrase “My dollar, your problem.” Empire imports prosperity while exporting crises, obscuring arrangements with high-minded phrases such as “rules-based international order.”
History shows a playbook when debt becomes out of control. At first, there will be a devaluation. He then retreated from the contested surrounding area. Finally, there are “protective transactions” imposed on allies. Ancient Rome pioneered this strategy and created a tributary client state while retreating from Britain in the second half of the 4th century. Following the lawsuit, the British invented the Commonwealth and retreated east of Suez. Both steps signaled the decline of the empire.
The US seems to be on the same path, just faster. NATO has been recast as a protective arrangement that requires US allies to invest huge sums in the US or face punitive tariffs. Long-standing friendships like those with India became sour when their partner refused to play alongside the Washington version of the event. As the extended wars declined, the United States redirected its doctrine inwards, prioritizing its homeland while retaining its limited capacity for intervention overseas.
However, the dollar holds the reserve currency situation and the US debt mountain continues to grow. Domestic politics requires more borrowing. That means Washington needs a new lever to increase debt demand.
Stablecoins appears to provide that lever. Born in protest after the 2008 crisis, cryptocurrency promised to escape from state control. Their mobilization was decentralization, freedom from central banks, and independence from Fiat currency.
Today, Washington is trying to bring them under regulations and nail them to the dollar (as stablecoins), requiring them to hold US property as backup reserves. By leading the crypto world’s global appetite into its own sovereign debt instrument, the United States is looking to extend its control of the financial world.
In the past, rulers with declining power often issue new coins supported by the old to maintain their trust in the regime. The rush that issues Stablecoins is an echo of that instinct. It is a scramble to make profits from the imperial decreasing currency by remaking debt. This is the background to what Russian President Vladimir Putin, Anton Kobyakov, said recently. “They have $35 trillion in debt, so they move it into the Crypto Cloud, cut it down and start from scratch.”
The irony is unmistakable. Technology designed to overthrow the dollar is now enlisted to maintain it. For years, Washington rejected the code as a means of fraud, ponzi schemes and laundry. It is now recast as a financial innovation, as policymakers see it as a tool for debt management. The Rebel tool has become a regulator device.
However, scale is difficult. The global Stablecoin market is worth less than $200 billion. This is a small portion of US debt. A possible mechanism is tokenization. Private or semi-public publishers can create digital versions of the Ministry of Finance for market absorption. Over time, Washington has been able to adjust maturity and interest payments to influence valuations, but regulations provide legitimacy.
The debt has not been legally erased, but such an abstraction allows us to restructure the obligations as Nixon’s 1971 gold shock rewritten the rules but was found to be practical.
The moral dimension is difficult to ignore. Stablecoins are supported by the same US Treasury Department, which forms the debt in question. The government issuing IOUS, selling them, and encouraging private issuers to repackage them into digital tokens held by global investors in a hurry. Unlike currencies that can cycle and fluctuate value without breaching its obligations, debt has a contractual promise of profit that must be respected.
But Washington allows inflation to quietly erode its true value. The result was equipped with debt alchemy, spoofing digital modernity.
All US debt operations create global ripples, including currency fluctuations, higher borrowing costs and rapid capital outflows. Washington’s fiscal ethics remains constant. Domestic problems need to find an international solution at someone else’s expense.
New Delhi cannot terminate the dollar system, but it can be prepared by expanding its rupee-based payment system, carefully regulating digital finance, and invoking global hypocrisy. Rather than sitting on the fence as policy wafts out, you need to take a clear attitude, such as keeping cryptocurrency at arm length.
Kobyakov’s criticism goes home. Ironically, it was the last defense of the dollar. For all the talk of decentralization, the Crypto is ready to become a state instrument. The cloud, which aims to free funds from sovereign stupidity, may instead be the smokescreen where America designs its next big escape. And when the fog rises, it is the rest of the world that itself will pay the bill.
The authors are corporate advisors and authors of “Family and Dhanda.” Co-founder and CTO of Deepstrut.
