Reconstruction of the Global Capital Concentration Structure: Impact of U.S.-Centered Stablecoin Expansion

Introduction: The Rise of Stablecoins and Digital Dollarization

In recent years, stablecoins have moved beyond their peripheral role in the cryptocurrency market to become core infrastructure that significantly influences global financial flows. Typically pegged 1:1 to the U.S. dollar, stablecoins offer minimal price volatility, making them highly attractive for international remittances and capital movement. In fact, in 2024, approximately $17 trillion in global stablecoin transaction volume was recorded, with over $5 trillion used solely for payments—exceeding one-third of Visa’s annual payment volume. This trend of digital dollarization suggests a restructuring of global capital concentration centered around the United States.

This report will analyze the structure of stablecoins and their link to the U.S. financial infrastructure, the mechanisms by which stablecoins contribute to capital concentration, their relationship with U.S. monetary policy and global influence, the resulting impact on non-stablecoins such as Bitcoin and Ethereum, and finally, future regulatory developments and global strategic responses.

---

1. The Structure of Stablecoins and Their Link to the U.S. Financial Infrastructure

Stablecoins are digital assets issued based on fiat currency reserves to maintain price stability. The most common form, U.S. dollar-pegged stablecoins, are issued at a 1:1 ratio to U.S. dollars deposited in bank accounts or invested in secure assets like Treasury bonds. This structure enables stablecoins to serve as “digital dollars,” allowing fast, low-volatility transactions on the blockchain. Thanks to this stability, stablecoins have become both a store of value and a medium of exchange, positioning them as the default transaction currency in cryptocurrency markets.

The issuance of stablecoins is closely intertwined with the U.S. financial infrastructure. Issuers manage large reserves of dollars in U.S. bank accounts (deposits) or short-term Treasuries, which requires connections with U.S. financial institutions. For instance, the issuer of USDC, Circle, holds accounts with major American banks like BNY Mellon, and a large portion of its reserves is invested in U.S. government bonds. These deposit accounts can be likened to traditional nostro accounts. A nostro account is a foreign currency deposit account that one bank holds in another country’s bank, typically used to prepare for international transactions. Similarly, stablecoin issuers deposit user funds in U.S. bank accounts and issue tokens accordingly, meaning global dollar liquidity concentrates in a few U.S. bank accounts.

Traditionally, international banks maintained distributed dollar reserves in nostro accounts to facilitate cross-border settlements. Now, with the advent of stablecoins, global dollar liquidity is shifting to the accounts of a small number of private issuers.

Moreover, the instantaneous settlement capabilities of stablecoins have sparked discussions around master accounts within the international financial system. A master account is a direct account held at the Federal Reserve that allows a financial institution to access the central bank’s payment system and settle transactions with other banks in real-time.

Currently, because stablecoins are issued by private entities, issuers cannot hold master accounts directly with the Fed and must instead access payment networks indirectly through commercial banks. However, as stablecoins grow in scale, discussions have emerged about whether issuers should be allowed to hold master accounts, just like banks. For example, Custodia Bank, established in Wyoming as a 100% reserve institution seeking to issue its own dollar token, applied for a master account but was denied by the Fed. This reflects the Fed’s cautious stance on allowing private stablecoin issuers direct access to the central banking infrastructure. Nevertheless, some propose that stablecoin issuers be allowed to hold 100% reserves directly in master accounts, and U.S. lawmakers are also considering legislation to regulate stablecoin issuers like banks, requiring them to fully collateralize with central bank money. These infrastructure-related discussions suggest that stablecoins are being gradually integrated into the traditional financial system while the U.S. simultaneously strengthens its ability to control the digital dollar ecosystem.

---

2. Mechanisms of Capital Concentration Through Stablecoins

The explosive growth of stablecoins has reinforced mechanisms by which global capital becomes increasingly concentrated in the United States. Each issuance of stablecoins is backed by U.S. dollar reserves that are accumulated in U.S. financial institutions, resulting in global funds flowing into American capital markets. To ensure liquidity and stability, issuers invest large portions of these reserves in safe U.S. assets such as Treasury bonds. As of 2024, stablecoin issuers collectively hold over $120 billion in U.S. Treasury securities—exceeding the holdings of major countries like South Korea or Germany. In fact, stablecoin issuers have emerged as the 18th largest holders of U.S. Treasuries, surpassing some traditional sovereign investors, and by late 2024, climbed to 16th place, overtaking Saudi Arabia and approaching France.

This capital concentration occurs through several pathways:

First, as global demand to hold stablecoins increases, equivalent dollar assets flow into the U.S. For example, if an investor in Asia buys USDT, local currency is exchanged for U.S. dollars, which are then deposited in the issuer’s account and invested in Treasuries. This drives up both dollar demand and U.S. bond purchases. Between 2020 and 2024, the total issuance of stablecoins surged more than 33-fold (from $12 billion to over $400 billion), and the capital they deployed into U.S. Treasury markets increased more than tenfold. The U.S. Treasury itself acknowledged that “the rise of stablecoins is boosting demand for short-term Treasuries.”

Second, the use of stablecoins in international payments promotes the “de-borderization” of capital. Traditionally, cross-border remittances required banks to draw from their nostro accounts using SWIFT, often taking days. With stablecoins, 24/7 real-time transfers occur in seconds, reducing the need for banks to maintain large nostro balances. Consequently, the same payment function can now be achieved with far fewer dollars, centralized in stablecoin issuers’ U.S. accounts. What was once dispersed liquidity becomes concentrated.

Additionally, in emerging markets or inflation-prone economies, people adopt stablecoins as a store of value, accelerating digital dollarization. As local currencies are abandoned in favor of dollar-backed tokens, capital exits the domestic system, weakening monetary sovereignty while strengthening the global influence of the U.S. dollar. The IMF has warned that “in monopolistic environments, stablecoins may erode the currencies of weaker nations, leading to a new form of dollarization.” Countries like Argentina, Turkey, and Nigeria, where currency instability is high, are already seeing widespread use of U.S. dollar stablecoins, reinforcing this effect.

Ultimately, stablecoins amplify the global capital flow into U.S. assets and markets, deepening the gravitational pull of the American financial system.

---

3. U.S. Monetary Policy and Global Influence

The proliferation of U.S. dollar-pegged stablecoins has the potential to significantly amplify the United States’ monetary policy transmission and global financial influence. First, as stablecoins become widely used digital representations of the U.S. dollar, they reinforce the dollar’s status as the global reserve currency. A recent report noted that “the evolution and adoption of dollar-based stablecoins enhance the dollar’s dominance.” U.S. policymakers share this view. Congressman French Hill, a senior member of the House Financial Services Committee, stated that stablecoin adoption helps preserve the dollar’s reserve currency status. Federal Reserve Governor Christopher Waller also expressed that “stablecoins contribute to the expansion of the dollar’s global standing.”

This indicates that the U.S. government increasingly views stablecoins as instruments to project dollar hegemony in the digital era. In fact, the U.S. administration inaugurated in 2025 issued an executive order prioritizing private dollar stablecoins as tools to uphold the dollar’s supremacy, while opposing the issuance of a central bank digital currency (CBDC).

Stablecoins are also becoming instruments of real-time financial sanctions and enforcement. Since many of the major stablecoins are issued by U.S. entities or subject to U.S. law, the U.S. government can enforce financial sanctions within the digital asset space. For example, when the U.S. Treasury sanctioned the crypto mixer Tornado Cash in 2022 for its alleged ties to Iran, Circle, the issuer of USDC, promptly froze associated wallet addresses, immobilizing approximately $70,000 worth of USDC. This demonstrated that the U.S. can now block access to digital dollar assets in real time, adding a new dimension to its sanctions toolkit. It also highlighted that users of dollar-pegged stablecoins worldwide are subject to U.S. regulatory influence, thus extending American legal norms into the digital finance realm.

The Federal Reserve’s monetary policy decisions increasingly affect the stablecoin ecosystem. Traditionally, rate hikes or quantitative tightening affected domestic financial conditions and global dollar liquidity. Now, they also impact the yield on stablecoin reserves. For instance, when the Fed raises interest rates, the returns on government bonds held as reserves increase, boosting issuer profits. During the 2023–2024 rate hike cycle, Tether reportedly generated billions of dollars in quarterly profits from reserve investments—surpassing the earnings of some major asset managers like BlackRock.

This accumulation of interest income by stablecoin issuers in a high-rate environment further concentrates capital within U.S. financial institutions. Conversely, if the Fed drastically cuts rates or reduces liquidity, returns on reserve assets may fall, potentially reducing stablecoin demand or triggering partial capital outflows. According to European Central Bank research, changes in U.S. monetary policy affect the stablecoin market cap more significantly than even shocks from the broader crypto market. This underscores the tight linkage between Fed policy and the global circulation of digital dollars.

Furthermore, since a significant portion of stablecoin reserves are invested in U.S. Treasuries, changes in stablecoin issuance can also affect Treasury demand and federal debt dynamics. If issuance expands, new demand for Treasuries arises; but if confidence in stablecoins falters and large-scale redemptions occur, issuers may be forced to liquidate their Treasury holdings quickly, potentially disrupting short-term financial markets. For this reason, U.S. regulators are closely monitoring stablecoin issuers as key participants in the new digital-era money markets.

In summary, the rise of stablecoins is extending the reach of U.S. monetary and fiscal policy into the digital domain, while also creating mutual interdependence—where the U.S. influences stablecoins, and stablecoins increasingly impact U.S. markets.

---

4. Impacts on Non-Stablecoins (BTC, ETH, etc.)

The expansion of the stablecoin ecosystem is reshaping the roles and perceived value of traditional non-stable cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH).

For Bitcoin, the shift has reinforced its narrative as a store of value or “digital gold.” Initially envisioned as a peer-to-peer payment system, Bitcoin’s price volatility has limited its use in everyday transactions. As stablecoins become the dominant medium for payments and remittances due to their price stability, Bitcoin is increasingly seen as an investment asset or hedge against inflation. This leads to a growing bifurcation in the crypto ecosystem: stablecoins serve as digital dollars for transactional purposes, while Bitcoin assumes the role of long-term value storage.

At the same time, the censorship risk and centralization associated with stablecoins have renewed interest in Bitcoin’s decentralization and resistance to control. As noted earlier, issuers like Circle can freeze stablecoin funds linked to sanctioned addresses. This raises concerns among users about the reach of U.S. legal influence and prompts some, especially in jurisdictions under financial sanctions, to pivot from stablecoins to truly permissionless assets like Bitcoin or Monero. In this regard, the success of stablecoins paradoxically underscores the philosophical value proposition of decentralized cryptocurrencies.

Ethereum, meanwhile, plays a more complex role in the stablecoin dynamic. As the primary blockchain platform for the issuance and transfer of most stablecoins—including USDT and USDC—Ethereum benefits from increased transaction volume. The surge in stablecoin usage directly boosts Ethereum network activity, which translates to higher transaction fees and demand for ETH, the network’s native token.

Since Ethereum’s implementation of EIP-1559, which introduced fee burning, rising transaction volumes also lead to a reduction in ETH supply. This enhances its scarcity and may support long-term price appreciation. Reports have found a positive correlation between stablecoin activity and ETH market performance, suggesting that the success of stablecoins contributes directly to Ethereum’s growth.

However, the dominance of centralized, dollar-backed stablecoins also poses risks to Ethereum’s decentralized finance (DeFi) ecosystem. Early DeFi projects aimed to create decentralized stablecoins, such as MakerDAO’s DAI, often backed by volatile crypto assets. Over time, these systems have grown increasingly reliant on centralized stablecoins like USDC as collateral. While this improves stability, it also exposes DeFi protocols to external censorship risks. For example, following the 2022 collapse of the Terra-LUNA algorithmic stablecoin, many DeFi platforms turned to USDC for greater reliability, but in doing so, increased their vulnerability to regulatory interventions.

The ecosystem faces a dilemma between decentralization and stability. Communities are now exploring ways to reduce reliance on centralized collateral and return to crypto-native assets like ETH, though this poses its own risks.

Alternative blockchains such as Tron and Solana have also competed to host stablecoin transactions. Tron, with its low fees, has captured a significant share of USDT transactions, while Solana is emerging as a high-speed platform for stablecoin-based financial applications. This competition suggests that the blockchain best positioned to support stablecoin use at scale could gain strategic advantage, influencing the valuation of its native token.

In summary, the rise of stablecoins strengthens Bitcoin’s identity as a digital store of value and enhances Ethereum’s role as a transactional platform. At the same time, it introduces new challenges to decentralization, censorship resistance, and systemic risk, especially in the DeFi landscape. These tensions will shape the future architecture of the crypto ecosystem.

---

5. Future U.S. Regulatory Directions, Issuer Dynamics, and Global Responses

In response to the rapid rise of stablecoins, governments around the world—particularly in the United States—are accelerating efforts to regulate and incorporate them into the traditional financial system. Since 2023, bipartisan discussions in Congress have focused on whether to classify stablecoin issuers as deposit-taking institutions, and whether to impose strict reserve requirements and asset quality regulations. The 2025 “Genuine Uniform Stablecoin Innovation and Security (GENUIS) Act” mandates that issuers maintain a 1:1 reserve ratio in U.S. dollars or high-liquidity assets and establishes oversight mechanisms.

U.S. regulators such as the Treasury Department, the Federal Reserve, and other financial authorities have released recommendations for incorporating stablecoins into the regulated space. The President’s Working Group on Financial Markets (PWG) proposed that stablecoin issuers should be subject to the same level of scrutiny as banks. Fed Chair Jerome Powell noted that private stablecoin expansion without legal authority could pose systemic risks. These regulatory efforts treat stablecoins as functionally similar to money market funds and seek to impose prudential rules.

U.S. lawmakers recognize that stablecoin regulation is strategically linked to national interests. Congressman Hill emphasized that legalizing stablecoins would help preserve the dollar’s global role. Senator Tim Scott also pledged to develop a framework that supports dollar-based stablecoins while ensuring consumer protection and anti-money laundering compliance. Proposals include restricting issuers to chartered banks and requiring reserves to be held exclusively in U.S. Treasuries. This would effectively turn stablecoins into digital equivalents of U.S. bank deposits, potentially eligible for deposit insurance and Fed liquidity support—albeit under real-time oversight.

The stance of major stablecoin issuers toward U.S. regulation is another key issue. Circle, which issues USDC, has taken a proactive approach to compliance, publishing regular audits and adhering to New York’s regulatory guidelines. In 2023, Circle disclosed that it holds significant reserves in BlackRock-managed Treasury funds and is seeking to become a federally regulated trust institution. Tether, on the other hand, is based in the British Virgin Islands and Hong Kong and has historically operated outside the direct jurisdiction of U.S. regulators. While Tether has improved transparency and reduced reliance on commercial paper, it still faces questions about its governance and audit practices. Nonetheless, over 85% of its reserves are now reportedly held in U.S. Treasury securities, exceeding $90 billion—making Tether one of the largest holders of U.S. debt globally.

If U.S. regulation tightens further and mandates domestic licensing, entities like Circle may be legitimized while offshore players like Tether could face restrictions or exclusion from U.S. financial infrastructure. However, Tether’s vast global user base, particularly outside the U.S., may limit the practical effectiveness of such enforcement. Still, regulatory divergence among issuers could reshape the market, favoring those aligned with U.S. policy.

Globally, countries and international organizations are also crafting their responses to the rise of dollar-based stablecoins. The European Union (EU) implemented the Markets in Crypto-Assets (MiCA) regulation in 2024, classifying stablecoins as electronic money tokens (EMTs) or asset-referenced tokens (ARTs). To protect euro sovereignty, the EU can suspend foreign currency-linked stablecoins if they exceed daily transaction limits (e.g., €200 million/day in consumer payments). Meanwhile, the digital euro (CBDC) is under development, though member state differences have slowed progress.

The United Kingdom, Japan, and Singapore have also introduced regulations. The UK amended its Financial Services Act to recognize stablecoins as payment instruments. Japan limited issuance of yen-pegged stablecoins to licensed financial institutions. Singapore’s MAS has implemented licensing frameworks requiring 1:1 reserve backing and immediate redemption rights.

International bodies like the Financial Stability Board (FSB) and the Bank for International Settlements (BIS) have called for global coordination to prevent regulatory arbitrage. The IMF has warned of “cryptoization” in emerging markets, urging governments to assess macroeconomic risks. Some countries (e.g., Nigeria, China) have moved to restrict crypto use outright. Yet, informal use of stablecoins persists, especially in dollar-scarce economies.

In parallel, many countries are developing CBDCs to offer public alternatives to private stablecoins. China has rolled out the e-CNY, while India, Brazil, and others are conducting pilots. While CBDCs offer state-backed trust, their slower development and limited interoperability mean that private stablecoins will likely dominate cross-border transactions in the near term.

---

Conclusion: Strategic Implications in the Digital Dollar Era

The expansion of U.S.-centered stablecoins is transforming global financial architecture, capital flows, and monetary power structures. Dollar-pegged stablecoins draw global capital into U.S. assets, reinforcing financial centralization while extending dollar dominance into the digital domain.

The U.S. is actively institutionalizing this advantage—leveraging regulation to secure strategic control, while allies pursue a dual strategy of protecting currency sovereignty and adopting efficient blockchain tools.

Within the crypto ecosystem, Bitcoin and Ethereum must redefine their roles in this new era. The tension between decentralization and regulatory integration is mounting. Stablecoins are poised to become critical infrastructure for global payments and financial inclusion, with far-reaching implications for monetary policy, geopolitical finance, and digital sovereignty.

Governments, corporations, and investors must treat stablecoins not merely as financial instruments, but as strategic vectors of influence. In the emerging digital dollar era, the battle over standards, trust, and interoperability will determine the next wave of global capital realignment—and with it, both risk and opportunity.