As global confrontation around trade picks up, we take a look at the strength the United States has in financial markets. Special crypto tokens called stablecoins have emerged as a tool to advance dollar dominance — a position some in US President Donald Trump’s administration have taken. The US position towards crypto differs from many other countries around the world. So how did they get there? We take a deep dive into the Heritage Foundation’s Project 2025 blueprint for a second Trump term and untangle the ideological roots of the administration’s thinking. To get there, we travel back in time to how money worked in the 19th century in the United States and how offshore dollar markets emerged in the late 1940s in London. Because the battlefields of money will play out about how much public backing each market segment will get in the future.
For more on free banking, the offshore dollar universe and stablecoins, we suggest the following reading:
– "The Suffolk Bank and the Panic of 1837: How a Private Bank Acted as a Lender-of-Last-Resort" by Arthur J. Rolnick, Warren E. Weber and Bruce D. Smith: https://www.minneapolisfed.org/research/working-papers/the-suffolk-bank-and-the-panic-of-1837-how-a-private-bank-acted-as-a-lenderoflastresort
– "On par: A Money View of stablecoins" by Iñaki Aldasoro, Perry Mehrling and Daniel H Neilson: https://www.bis.org/publ/work1146.htm
– "The Geopolitics of Swap Lines" by John Michael Cassetta: https://www.hks.harvard.edu/centers/mrcbg/publications/awp/awp181
CHAPTERS
00:00 Intro
00:19 What is free banking
01:17 Why Stablecoins are similar to free banking
02:30 How Stablecoins strengthen dollar dominance
04:20 Why a lender of last resort is crucial
06:24 The vast domain of offshore dollar
07:52 How swap lines backstopped the offshore dollar world
09:56 Stablecoins lack a lender of last resort
10:45 The United States’ unique path towards digital currencies
#dollardominance #crypto #stablecoins #dollar #federalreserve #project2025
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