The Bitcoin Policy Institute (BPI) has released a new policy in the United States that aims to establish what it calls “stablecoin supremacy.” The proposal, published on Wednesday, is organized around five policy areas and comes after the GENIUS law that has already been implemented.
Warning from the Bitcoin Policy Institute
At the heart of the BPI argument is Ask that regulated stablecoins could help increase US control over foreign dollar markets. In the organization’s view, doing so will not only reduce potential risks but also undermine what it sees as China’s push for digital currency.
The BPI explains how offshore banks can make dollar loans on their own, take profits from intermediation, and rely on the Federal Reserve (Fed) as a kind of stable backstop when the system is struggling.
The BPI classifies this setup as dangerous vulnerability to the US economy. Therefore, the organization says that regulated stablecoins provide the United States with a tool to change the situation.
Collaborative Reading
Under the GENIUS Act, which was signed into law in July 2025, the BPI states that stablecoin issuers must hold 100% of their reserves in instruments such as Treasury bills, Treasury repos, or insured deposits. The law also prohibits lenders from lending to the bank.
BPI says the result is that a foreign person or organization owns a stablecoin associated with GENIUS instead of investing in Eurodollar currencyA proper Treasury security rests on the balance sheet of a US-controlled corporation rather than empowering offshore nations to increase debt.
In the BPI’s arrangement, the value of the dollar can move around the world, but the reserve remains “at home,” reducing what it calls the external vulnerability of the Triffin Dilemma.
Stablecoin Supremacy Blueprint
BPI also links the issue of stablecoins to the greater competition of digital assets. It says that Digital Yuan of China is now paying interest to its holders and that China’s Cross-Border Interbank Payment System handles transactions in 190 countries.
The organization also points to the European MiCA regime, arguing that it offers a system of euro-based stablecoins that, in some ways, is superior to the one in use in the US.
Taken together, the BPI says these developments reduce America’s influence on the “railway” where money flows — an area the BPI calls the most competitive and weak part of the dollar’s dominance.
In order to respond, the organization is proposing a plan to improve the stability of the stablecoin in five policy areas. First, it needs to be dried GENIUS Act implementation in the construction of the backstop.
The BPI describes this as the creation of dedicated repos with primary dealers and the establishment of a mechanism to access the Federal Reserve Standing Repo Facility, with the goal of making peer-to-peer stablecoins more attractive than offshore alternatives.
Second, the BPI wants the United States to send stablecoins instead of Eurodollars for international trade stabilization. The goal, according to the agency, would be to pull the Treasury’s interest rate higher and eliminate what it describes as increasing foreign debt in low dollar terms.
Collaborative Reading
Third, BPI opposes fees and rewards that allow stablecoins to compete with Eurodollar interest-bearing deposits and Chinese digital yuan, while remaining within the GENIUS Act’s anti-interest-bearing rules.
Fourth, the addresses provided Decentralized Finance (DeFi) risks. The BPI warns of the proliferation of DeFi debt and calls for restrictions on smart contracts and enforcement of “chokepoints” to ensure that unregulated protocols cannot multiply Eurodollars on blockchain networks.
Finally, the BPI says the US should maintain foreign currency control by supporting local currency systems along with the establishment of stablecoins. The organization does this as a way to ensure that the stablecoin community works as a shared resource development rather than a financial coercion.
According to the agency’s proposal, these goals can be achieved without extending additional debt to foreign governments or increasing the Federal Reserve’s monetary policy.
Image taken from OpenArt, chart from TradingView.com
