The Bitcoin Coverage Institute (BPI) has launched a brand new coverage proposal for the USA aimed toward establishing what it calls “stablecoin supremacy.” The proposal, printed on Wednesday, is structured round 5 coverage areas and comes on the heels of the already-enacted GENIUS Act.
Bitcoin Coverage Institute Warning
On the heart of BPI’s argument is the declare that regulated stablecoins might help lengthen US oversight over offshore greenback markets. Within the institute’s view, doing so wouldn’t solely scale back systemic dangers but additionally blunt what it frames as China’s push into digital forex.
The BPI describes how offshore banks can create dollar-denominated credit score on their very own, seize the income from intermediation, and depend on the Federal Reserve (Fed) as a type of implicit backstop when the system strains.
BPI characterizes this setup as a critical vulnerability for the US economic system. Due to that, the institute argues that regulated stablecoins provide the USA a software for restructuring the underlying dynamic.
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Underneath the GENIUS Act, signed into legislation in July 2025, BPI says stablecoin issuers should preserve 100% reserves in devices comparable to Treasury payments, Treasury repo, or insured deposits. The legislation additionally prohibits issuers from lending in opposition to these reserves.
BPI says the result’s that when a international particular person or company holds a GENIUS-compliant stablecoin as a substitute of putting funds in a Eurodollar deposit, the related Treasury safety sits on the stability sheet of a US-regulated entity somewhat than feeding the offshore system’s means to multiply credit score.
In BPI’s framing, the greenback worth can transfer all over the world, however the reserve stays “dwelling,” decreasing what it calls the exterior vulnerability dimension of the Triffin Dilemma.
Stablecoin Supremacy Blueprint
BPI additional hyperlinks the stablecoin case to broader aggressive pressures in digital property. It notes that China’s digital yuan now pays curiosity to holders and that China’s Cross-Border Interbank Cost System processes transactions throughout 190 nations.
The institute additionally factors to Europe’s MiCA regime, arguing it supplies a framework for euro-denominated stablecoins that’s, in some respects, extra superior than present US implementation.
Taken collectively, BPI says these developments weaken American affect over the “rails” the place cash really strikes—an space BPI calls each probably the most contested and most fragile a part of greenback dominance.
To reply, the institute proposes a framework to advance stablecoin supremacy throughout 5 coverage areas. First, it requires hardening GENIUS Act implementation by constructing a backstop structure.
BPI describes this as creating dedicated repo traces with major sellers and establishing a path to Federal Reserve Standing Repo Facility entry, with the purpose of creating compliant stablecoins extra engaging than offshore options.
Second, BPI proposes that the USA export stablecoins somewhat than Eurodollar deposits in worldwide commerce settlement. The purpose, in accordance with the institute, can be to drag Treasury demand again onshore and eradicate what it describes because the offshore credit score multiplier on marginal greenback flows.
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Third, BPI argues for a charge and rewards strategy that enables regulated stablecoins to compete with interest-bearing Eurodollar deposits and even China’s digital yuan—whereas nonetheless staying inside the GENIUS Act’s statutory curiosity prohibition.
Fourth, the proposal addresses decentralized finance (DeFi) dangers. BPI warns about DeFi credit score multiplication and requires smart-contract-level restrictions and enforcement “chokepoints” to make sure unregulated protocols can’t replicate the Eurodollar multiplier on blockchain networks.
Lastly, BPI says the US ought to protect international forex sovereignty by supporting native financial methods alongside stablecoin adoption. The institute frames this as a approach to make sure stablecoin integration acts as shared financial growth somewhat than monetary coercion.
Within the institute’s view, these targets may be achieved with out issuing further sovereign debt to international governments or increasing the Federal Reserve’s stability sheet.
Featured picture from OpenArt, chart from TradingView.com
