For most users, a stablecoin looks like a dollar with a software wrapper. In Washington, it can look like a new buyer of sovereign debt. In Beijing, it is evidence that payment rails have become strategic infrastructure. In Brussels, it is a warning that monetary sovereignty can be lost gradually, without a treaty or a formal political decision.
Marieke Flament, a former Circle executive and former chief executive of the NEAR Foundation, studies this contest with Nicolas Colin at Currency of Power. Her argument is simple: money is power, and that power is moving.
Bretton Woods, the break with gold and the depth of American capital markets turned the United States into a vast investment platform. Dollars earned abroad returned to US assets, while global demand for the currency helped finance the American state.
Now the system is under strain. The financial crisis of 2008 damaged trust in its institutions. Sanctions imposed on Russia after the annexation of Crimea in 2014 showed how access to dollar-based finance could be used strategically. China took note.
How Stablecoins Convert Demand Into Financial Power
The link between stablecoins and American debt is easy to miss. Issuers hold reserves against the tokens they place in circulation. For leading regulated dollar issuers, those reserves typically include cash and short-dated US government securities. Demand for digital dollars can therefore generate demand for the assets backing them.
The buyer matters. Foreign governments can reduce their Treasury holdings when relations deteriorate. A stablecoin spreads dollar demand across millions of people and businesses seeking a tool for trade, savings or payments. They may live far beyond the United States, yet their choice of money can still support American debt markets.
This also separates a stablecoin from a tokenized deposit. A tokenized deposit remains commercial bank money recorded on a new rail. A stablecoin is issued against a separate reserve and can circulate outside the traditional account structure. Both can be useful, but they serve different purposes.
China Is Building Its Own Rails
China does not necessarily need to replace the dollar as the world’s reserve currency. Flament sees a more targeted strategy: reduce exposure to sanctions and transact through infrastructure the country controls.
That ambition is part of what she calls a “full-stack society” — one with domestic technology, energy capacity, critical minerals and financial networks. China remains linked to the dollar, including through Hong Kong’s dollar peg, while building alternatives that preserve its freedom to act. The likely outcome is a more fragmented financial system rather than clean de-dollarization.
Europe’s Stablecoins Problem
Europe’s domestic payment system works, and the planned digital euro is focused largely on retail use inside the currency area. The gap emerges when money must cross borders, settle tokenized securities or serve autonomous software agents around the clock.
These markets gravitate toward the deepest liquidity. Today, that means dollar stablecoins. Once wallets, exchanges, treasury systems and AI agents are built around one currency, network effects become difficult to reverse. A European may never think of herself as dollarized, yet a crypto portfolio held through USDT or USDC already points in that direction.
Companies face the same incentive. An exporter that needs to pay a supplier over a weekend or move funds through a costly corridor will use the instrument that works. This can create a “stablecoin sandwich”: local currency becomes a dollar token, moves almost instantly, then returns to local currency at the destination.
Europe Needs a Complete Digital-Money Stack
Qivalis, backed by 37 European financial institutions, is intended to provide a euro-denominated alternative. Its importance lies in giving European companies and markets a common instrument for cross-border payments and on-chain settlement.
A credible European architecture would have several layers. Wholesale central bank money could provide the safest settlement asset. Tokenized deposits could connect commercial banks and their clients. A regulated euro stablecoin could serve open networks, global trade, tokenized markets and agentic commerce. Flament even sees a case for allowing wholesale central bank digital currency to form part of stablecoin reserves, though the political prospects remain slim.
The obstacle is strategic rather than technical. Europe has yet to decide what it wants the euro to become. The United States is extending the dollar through private digital networks. China is gaining control over the rails beneath trade. Europe is still debating while network effects accumulate elsewhere.
No currency regime is permanent. The pound once occupied the position now held by the dollar. The next transition may take years, and its final shape is unknowable. What is already visible is the contest: control over digital money is becoming control over commerce, capital and political autonomy.
Guest: Marieke Flament, Independent Board Director, Strategic Advisor & Co-Author, Currency of Power
Marieke Flament on LinkedIn: linkedin.com/in/mariekeflament
Currency of Power (Marieke Flament & Nicolas Colin): currencyofpower.co
Qivalis, the regulated euro stablecoin backed by European banks: qivalis.eu
Ray Dalio, Principles for Dealing with the Changing World Order (referenced in the episode)
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