US Dollar’s Global Role Under Scrutiny
A significant shift in global financial dynamics could be on the horizon, potentially triggered by the U.S. push to regulate dollar-backed stablecoins. This initiative is sparking fears of widespread monetary destabilization. Amundi, Europe’s largest asset manager with over €2 trillion ($2.36 trillion) in assets under management, raised concerns on July 3 that the recent passage of the GENIUS Act by the U.S. Senate—a bill establishing oversight for U.S.-dollar-pegged crypto tokens—could profoundly reshape global money flows and inadvertently diminish the dollar’s preeminent position.
Amundi’s Skepticism on GENIUS Act
Vincent Mortier, Chief Investment Officer at Amundi, expressed skepticism about the potential consequences of the GENIUS Act, telling Reuters the bill “could be genius, or it could be evil.” While the GENIUS Act mandates that these assets be pegged to the U.S. dollar, potentially stimulating greater demand for U.S. Treasury bonds, Mortier cautioned that this trend might backfire. He argued, “In doing so, you create an alternative to the U.S. dollar and that could lead to more weakening of the dollar,” suggesting that promoting a stablecoin could be perceived as signaling a lack of confidence in the dollar’s inherent strength.
The GENIUS Act: Framework for Stablecoins
The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act successfully passed the Senate in June 2025. This landmark legislation aims to create a comprehensive federal framework for regulating payment stablecoins. Its objectives include boosting financial stability, enhancing consumer protection, and fostering innovation within the digital asset space. The GENIUS Act is now poised for a pivotal House vote in mid-July, representing a crucial step in formalizing the regulatory landscape for stablecoins in the United States.
Nuanced Concerns from Global Institutions
While U.S. policymakers largely advocate for the GENIUS Act as a strategic move to solidify the U.S. dollar’s preeminent position in the evolving digital economy, global institutions like Amundi are articulating specific, nuanced concerns. As Mortier highlighted, despite the explicit requirement for stablecoins to be pegged to the U.S. dollar, the act could inadvertently and subtly diminish the dollar’s unique global status. This potential weakening could contribute to its overall decline, raising complex questions about the long-term impact of a rapidly expanding dollar-pegged digital currency market on global money flows and the risk of broader monetary destabilization.
Projected Stablecoin Growth and Global Reach
JPMorgan, a leading financial institution, projects that stablecoin circulation could reach an astounding $500 billion by 2028. This rapid expansion of a dollar-pegged digital currency market is significant, especially considering that over 90% of existing stablecoins are dollar-denominated and a substantial portion of transactions occur outside the U.S. This global reach and projected growth raise complex questions about the long-term impact on international money flows and the potential for broader monetary destabilization, as these digital assets increasingly become a part of the global financial infrastructure.
Implications for Dollar Dominance
The concerns raised by Amundi and the projected growth of stablecoins highlight a critical debate regarding the future of the U.S. dollar’s global dominance. While stablecoins are pegged to the dollar, their widespread use as an alternative medium for digital transactions could, paradoxically, reduce the direct demand for physical dollars or traditional dollar-denominated financial instruments. This subtle shift in how global value is transferred and stored could have unforeseen consequences for the dollar’s status as the world’s reserve currency, prompting careful consideration by policymakers.
Reshaping Global Money Flows
The regulatory push for stablecoins in the U.S. is poised to reshape global money flows in profound ways. As digital assets become more integrated into international finance, the mechanisms by which value is transferred and settled will evolve. The GENIUS Act, while aiming to strengthen U.S. financial stability and innovation, also introduces new variables that could influence the dynamics of global currency markets. The ongoing discussions and analyses by institutions like Amundi underscore the need for a comprehensive understanding of these complex interdependencies to navigate the evolving landscape of digital finance.
