Dollar Dominance Through Stablecoins – In the high-stakes world of digital finance, regulation has become a geopolitical weapon. As the United States charges ahead with a pro-stablecoin agenda under the new administration, Europe finds itself navigating increasingly turbulent waters—caught between safeguarding investor protection and maintaining global competitiveness.
Few understand the implications of this shift better than Dr. Hagen Weiß, head of corporate blockchain at Dentons Germany. A former BaFin official and contributor to Germany’s first Electronic Securities Act, Weiß has sat at the intersection of regulation and innovation for over a decade. In conversation with Bitcoin, Fiat & Rock’n’Roll podcast host Stefan Grasmann, Weiß painted a complex but urgent picture of the global regulatory arms race shaping the future of crypto.
The Stablecoin Strategy: Dollar Dominance Through Stablecoins
At the heart of the U.S. approach is the stablecoin—digital assets pegged to fiat currencies like the dollar. According to Weiß, the American pivot toward stablecoins is not just economic, but deeply geopolitical. “They are definitely using it as a tool to strengthen American dominance,” he explains, pointing to legislative proposals like the Genius Act, which would define stablecoins as dollar-backed assets and streamline their legal treatment, including exempting them from outdated securities laws.
This, Weiß believes, is part of a larger playbook: “The U.S. is playing catch-up, yes—but they’re doing it fast and with clear intent.” The implications are profound. With digital dollars gaining traction and U.S. banks like State Street and Citibank preparing to offer crypto custody services, the financial ecosystem is shifting westward.
Europe’s Response: CBDCs and Regulatory Restraint
In Brussels, the mood is cautious. European Central Bank officials have revived talk of a digital euro—a Central Bank Digital Currency (CBDC)—as a potential counterweight. But Weiß urges caution. “It’s too early for MiCAR 2.0,” he warns, referencing the EU’s landmark Markets in Crypto-Assets Regulation (MiCAR). “We haven’t even seen MiCAR 1.0 fully implemented yet. Let’s not run before we can walk.”
Still, Weiß acknowledges that MiCAR’s strict stance on stablecoins—especially the prohibition of interest-bearing variants—puts Europe at a disadvantage. “Yield-bearing stablecoins are already out there. The genie’s out of the bottle,” he says. “If we don’t adapt, we risk being squeezed between the U.S. and more agile jurisdictions.”
The Global Chessboard: Who’s Winning?
While the U.S. is gaining momentum, Weiß notes that traditionally innovation-friendly jurisdictions like the UK and Switzerland have been surprisingly slow to react. Meanwhile, newer players in the Middle East are advancing quickly, offering regulatory frameworks that support yield-bearing stablecoins and tokenized money market funds.
These developments could tilt the balance of power in global finance. “We may be heading into a regulatory competition for the most attractive stablecoin ecosystem,” Weiß suggests. “That will directly influence the competitiveness of the underlying fiat currencies.”
DeFi, Airdrops, and Institutional Custody: New Frontiers
The shift in U.S. policy is also reverberating across DeFi and institutional finance. With crypto-favorable figures like Paul Atkins expected to take key regulatory roles, Weiß anticipates a move away from “regulation by enforcement” and toward more pragmatic legislative clarity.
That could unlock new design possibilities for governance tokens and tokenomics models that have long been stifled by fear of being labeled securities. “It’s about moving from a shareholder economy to a stakeholder economy,” says Weiß. “But without regulatory clarity, projects won’t take the risk.”
At the same time, U.S. banks are positioning themselves to dethrone centralized players like Coinbase as custodians of institutional Bitcoin. The effect, Weiß explains, could be beneficial: “The more actors in a system, the more robust it becomes. It’s about decentralization—not just of networks, but of services.”
Lessons for European Regulators
So what should Europe do? Weiß offers a two-pronged strategy: “First, let others make mistakes and learn from them. But second, don’t be too granular. Over-regulation suffocates innovation.”
He urges regulators to remember their role is not to obstruct, but to enable. “Yes, you must ensure market stability. But we all share the same goals. The startup trying to build the next DeFi protocol and the regulator ensuring investor safety—they’re not enemies. They’re co-pilots in building the financial infrastructure of the future.”
The Bigger Picture: A Call for Boldness
Ultimately, Weiß sees crypto not just as a financial revolution, but as a geopolitical necessity. “The cautious approach doesn’t work anymore,” he warns. “Europe needs to be bold now. The world isn’t waiting.”
With MiCAR as a solid foundation, but by no means a final destination, the EU must decide whether to lead or follow in this digital monetary age. The U.S. has made its move. The question is—what’s Europe’s next play?
🎧 Tune in now and join the conversation.
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