U.S. government finances are failing. But instead of allowing things to continue to their inevitable demise, the central planners are looking to pull off another switcheroo. Like the issuance of Greenbacks during the Civil War or FDR’s gold confiscation in 1933, the U.S. government is scheming to radically change the form and feel of money once again. The goal is to mask an outright default. Yet make no mistake, the little guy – that’s you – will get screwed.
The GENIUS Act and the New Digital Dollar
America is 54 years into its experiment with pure fiat money, which followed the termination of the Bretton Woods Agreement in 1971. We are now witnessing the start of another financial re-engineering of money. The move to a digitally native, stablecoin-anchored dollar system.
This is happening whether you like it or not. In fact, the overarching legislation has already been put in place.
It’s called the GENIUS Act. And it was signed into law by President Trump on July 18, 2025. The acronym stands for Guiding and Establishing National Innovation for U.S. Stablecoins Act.
Stablecoins, if you didn’t know, are a type of cryptocurrency that are backed by assets considered to be reliable such as a national currency or a commodity. Stablecoins are typically used to transfer funds between different cryptocurrency tokens.
The GENIUS Act requires stablecoins to be backed one-for-one by U.S. dollars or other low-risk assets. Its focus is on mandating 100 percent reserve backing for payment stablecoins, primarily with short-term U.S. Treasuries. This policy commences the next shift in American money.
The stablecoin framework links the exploding global digital asset economy directly to U.S. liabilities. Every time a stablecoin issuer creates a digital unit, they are legally compelled to purchase a piece of U.S. debt (to maintain their 1:1 backing).
As digital trade, tokenized assets, and instant payments grow worldwide, the demand for these stable, regulated, dollar-pegged assets (stablecoins) will become immense. This translates directly into a structural, near-unlimited demand for U.S. Treasury bills.
If this works, as intended, the U.S. government will have a virtually unlimited pool of credit to finance its spending and debt. So, too, the demand for dollars created by the 1:1 backing with stablecoins will preserve the dollar’s value and its status as the reserve currency of the world.
The Complete Digitization of Finance
The stablecoin, in effect, is becoming the “New Digital Dollar.” That is, a private-sector tokenized liability that is globally liquid and instantly settled yet remains tethered to the sovereign credit of the U.S. government through the Treasury reserve requirement. It’s fiat money on steroids, reinforced by digital demand.
It should also be noted that this “new dollar” is not a Central Bank Digital Currency (CBDC) issued by the Federal Reserve. Instead, it is the private sector’s tokenized, regulated, and dollar-backed stablecoin.
In this scenario, the “old dollar” (physical cash and traditional bank deposits) begins a long, slow decline. Physical currency (cash dollars) will become a niche product, still legal tender but used mostly for small, private, or ceremonial transactions.
At the same time, the vast mountain of old debt (current national debt) doesn’t disappear. Instead, its refinancing and management will become significantly easier. The stablecoin ecosystem will act as a colossal, passive, non-taxpayer funding source for the Treasury, injecting stability and liquidity that reduces political stress around government borrowing.
This digital dollar transition paves the way for the complete tokenization of finance. All assets – stocks, real estate, commodities, and art – will be represented by tokens on a blockchain. Transactions will use stablecoins for instant, 24/7/365 settlement, eliminating the multi-day lag of legacy banking systems. Thus, the world’s finance will move from the slow, segmented rails of the 20th century to the lightning-fast, transparent rails of the 21st.
Of course, this complete digitization of money comes with full system surveillance and tracking. There are some sinister predictions that a person’s spending will be tracked and tied to their social credit score, and even their health metrics.
For example, if you exceed your carbon credit allotment for the month you will not be able to buy gas and will be forced to ride the bus. Or, if you’re overweight, certain food items will get rejected from your grocery purchase at the checkout counter.
Certainly, this new era of money that’s coming seems a bit wild and abstract. But there’s more. The GENIUS Act isn’t the only thing in the works to remake money as we know it…
Monetizing the U.S. Balance Sheet
Simultaneously, key figures like Treasury Secretary Scott Bessent have publicly discussed the idea of “monetizing the asset side” of the U.S. government’s balance sheet. This centers on the long-held debate over the U.S. gold reserves.
Currently, the U.S. government holds its massive gold reserves of 261.5 million troy ounces on its books at an official, ceremonial price of $42.22 per ounce, a value set in 1973. This results in a total book value of about $11 billion. But the true market value of the gold at its current price – over $4,000 per ounce – is over $1 trillion.
Bessent’s idea is to revalue the gold to its market price. This would immediately create a trillion-dollar-plus paper surplus on the government’s balance sheet. This windfall isn’t actual cash, but an accounting mechanism.
This newly recognized asset value could be used to seed a U.S. Sovereign Wealth Fund, which would create a massive endowment for strategic national investments in technology, energy, and AI. It would also provide a massive visual counterweight to the national debt, fundamentally changing the psychological perception of the nation’s financial health as it navigates the digital transition.
To really capitalize on the gold revaluation, the U.S. Treasury could revalue the price of gold much higher – say at $20,000 per ounce. This would act as an abrupt debasement of the dollar, while inflating away something on the order of $5 trillion in government debt. It would also buy some time while the dollar demand created by the burgeoning use of stablecoins develops.
In short, the GENIUS Act tackles the dollar’s liabilities (debt demand), while the gold revaluation addresses its assets. Together, they form a coordinated, unprecedented strategy to fortify the U.S. financial position against global rivals.
Will it work to America’s advantage? Will the loss of financial privacy destroy what’s left of freedom and liberty for American citizens?
The Great Digital Dollar Switcheroo
The political push to make the U.S. the “crypto capital of the world” is a consistent theme of President Trump and the current administration. This posture is seen as a key strategy for economic growth and maintaining technological leadership. However, this policy drive is shadowed by the lucrative, high-profile crypto ventures of the President’s family.
The Trump family’s reported financial involvement in the crypto space, including co-founding a decentralized finance (DeFi) firm that issued its own stablecoin (USD1) and launching affiliated meme coins (like $TRUMP), is certainly something to scrutinize.
Trump’s legislative and policy actions – particularly the wholesale embrace of private digital assets and the rejection of a Fed-issued Central Bank Digital Currency (CBDC) – could directly and significantly inflate the value of his family’s private holdings. This muddies the waters between whether policy decisions are being made for the national good or for personal financial gain.
Whether you like it or not, the move to a digital dollar is inevitable. The question is not if the financial system will change, but how the new rules will be set, who will profit, and whether the foundational integrity of the world’s reserve currency can survive the transition unscathed.
The answers to these questions will be revealed in good time. But, in the meantime, these developments should not be ignored.
By all accounts, we’re sitting on the cusp of the biggest financial switcheroo since the end of the gold standard. It’s not just about a new coin. It’s about a new kind of dollar, a new way to manage debt, and a complete rewrite of the U.S. financial balance sheet.
The transition to a new era of money, like stablecoins regulated under the GENIUS Act, comes with both opportunities and risks for the average person’s wealth. The GENIUS Act aims to bring stability to payment stablecoins by requiring them to be backed one-to-one by high-quality assets (like U.S. dollars and short-dated Treasuries) and mandating regular financial disclosures and audits.
While these rules are designed to provide stability, the actual transition will undoubtedly be messy.
[Editor’s note: The above article is an extract from the December edition of MN Gordon’s Wealth Prism Letter. Paid up subscribers also discovered several proactive steps to safeguard their wealth during this period of extreme uncertainty. Become a subscriber and access this critical information today.]
Sincerely,
MN Gordon
for Economic Prism
Return from The Digital Dollar Switcheroo to Economic Prism
