Bitcoin Policy Institute Maps Out Strategy For US Stablecoin Supremacy Across 5 Policy Areas
The Bitcoin Policy Institute (BPI) has launched a brand new coverage proposal for the United States aimed toward establishing what it calls “stablecoin supremacy.” The proposal, revealed on Wednesday, is structured round 5 coverage areas and comes on the heels of the already-enacted GENIUS Act.
Bitcoin Policy Institute Warning
At the middle of BPI’s argument is the (*5*)that regulated stablecoins may also help prolong US oversight over offshore greenback markets. In the institute’s view, doing so wouldn’t solely scale back systemic dangers but in addition blunt what it frames as China’s push into digital foreign money.
The BPI describes how offshore banks can create dollar-denominated credit score on their very own, seize the earnings from intermediation, and depend on the Federal Reserve (Fed) as a form of implicit backstop when the system strains.
BPI characterizes this setup as a severe vulnerability for the US economy. Because of that, the institute argues that regulated stablecoins supply the United States a software for restructuring the underlying dynamic.
Under the GENIUS Act, signed into regulation in July 2025, BPI says stablecoin issuers should preserve 100% reserves in devices comparable to Treasury payments, Treasury repo, or insured deposits. The regulation 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 an alternative of putting funds in a Eurodollar deposit, the related Treasury safety sits on the steadiness sheet of a US-regulated entity fairly than feeding the offshore system’s capacity to multiply credit score.
In BPI’s framing, the greenback worth can transfer around the globe, however the reserve stays “residence,” lowering 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 Payment System processes transactions throughout 190 international locations.
The institute additionally factors to Europe’s MiCA regime, arguing it offers 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 strains with main sellers and establishing a path to Federal Reserve Standing Repo Facility entry, with the aim of constructing compliant stablecoins extra enticing than offshore alternate options.
Second, BPI proposes that the United States export stablecoins fairly than Eurodollar deposits in worldwide commerce settlement. The intention, in keeping with the institute, can be to tug Treasury demand again onshore and eradicate what it describes because the offshore credit score multiplier on marginal greenback flows.
Third, BPI argues for a price and rewards method that enables regulated stablecoins to compete with interest-bearing Eurodollar deposits and even China’s digital yuan—whereas nonetheless staying throughout 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 not replicate the Eurodollar multiplier on blockchain networks.
Finally, BPI says the US ought to protect international foreign money sovereignty by supporting native financial techniques alongside stablecoin adoption. The institute frames this as a method to make sure stablecoin integration acts as shared financial growth fairly than monetary coercion.
In the institute’s view, these objectives might be achieved with out issuing extra sovereign debt to international governments or increasing the Federal Reserve’s steadiness sheet.
Featured picture from OpenArt, chart from TradingView.com
