"China Is Worried About Dollar-Backed Stablecoins" - by CWP alum Zongyuan Zoe Liu
The power to control access to money is no longer the exclusive privilege of the sovereign. Increasingly, the rules governing how money is created, moves, and is held are enforced not by governments alone but by code, online networks, and protocols beyond the authority of any single nation. The U.S. GENIUS Act—short for Guiding and Establishing National Innovation for U.S. Stablecoins—formalizes this transformation of money by creating a framework for regulated U.S. banks to issue dollar-backed stablecoins: digital tokens designed to reliably trade near their $1 par value because they are backed by real dollars or safe assets held in reserve.
These tokens can move instantly across the internet, often bypassing the traditional banking system and its know-your-customer rules. Many operate on decentralized blockchains where transactions are recorded on public ledgers maintained by distributed computer networks that span the globe—beyond the practical reach of any sovereign authority.
By Zongyuan Zoe Liu, a columnist at Foreign Policy and the Maurice R. Greenberg Fellow for China Studies at the Council on Foreign Relations.
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