In today’s Issue:
- The world’s most boring investment will destroy everything
- Too good to ignore, too powerful to permit
- How the world will change, radically
I believe one trend will dominate financial markets in 2026. It centres on the most boring investment you can possibly imagine. A cryptocurrency that doesn’t go up or down in price.
It might sound melodramatic. But if I’m right, the US government is preparing to use this investment to trigger an economic civil war in any country that opposes its economic and geopolitical dominance.
A global economic civil war sounds like a paradox. What I mean is that populations within countries will soon be able to “opt out” of their economic ties to their country. And adopt the US as their economic jurisdiction, without ever setting foot in the place.
For most people in the world, adopting the US’s currency and jurisdiction would be a radical improvement. But it risks leaving their own national government high and dry.
That’s why the rise of this cryptocurrency will have the power to destroy national currencies, disband governments and make many of the world’s most valuable companies obsolete.
In 2026, this threat will become evident. And the implications will begin to unfold. In fact, it has already begun to play out in Africa.
Governments and central banks are panicking
The South African central bank is warning that the US’s new economic weapon could give every citizen the ability to dodge its capital controls.
The Bank of England and the Federal Reserve have run simulations on what it means for their banking system. They concluded there’s a risk of deposit flight. But this time, the government won’t be able to stop it.
The International Monetary Fund and Bank of International Settlements are warning of back-door dollarisation. Meaning people will suddenly have access to US dollar accounts that are outside their government’s surveillance and jurisdiction.
Which would make it impossible for governments to tax or track their own citizens…
Instead, only one government would be left with complete control over and surveillance of the global financial system.
What is this new threat? And who stands to benefit?
Stablecoins are better than bitcoin and money
Bitcoin promised a parallel monetary system. At first, it appeared a miracle cure to all our financial woes…
Bitcoin doesn’t need banks to work. You can’t stop payments by imposing a bank holiday.
It doesn’t need payment processing companies like Visa and Mastercard, which are expensive.
Governments cannot prevent bitcoin transactions. They struggle to confiscate bitcoin from the “bad guys” accounts, and freezing them isn’t an option like it is in the traditional finance system.
Central banks can’t print bitcoin. So it is impervious to the threat of inflation.
Bitcoin is global, instant and cheap to use.
At least, it was supposed to be all these things…
But in practice, things got rather messy. If only because the price keeps changing. This wreaks havoc on those trying to actually use bitcoin as money.
Its proponents have responded by not using it as money. They hold it in hope of a capital gain. Which may make plenty of sense. But it has opened up an opportunity…
What if we could have all the benefits that bitcoin promised…without the chaos of fluctuating value?
That’s what President Trump’s GENIUS Act promises. It aims to lay the foundations necessary to enshrine US dollar stablecoins as a currency of the realm.
Stablecoins are cryptocurrencies that are supposed to hold their value against a government money. Around 99% of stablecoins are US dollar stablecoins. The idea is that each US dollar stablecoin is worth US$1.
I won’t dig into how they work here. First, though, you should be aware of the implications…
While most analysis of stablecoins so far has focused on what could go terribly wrong, I’m worried about the opposite…
What could possibly go right?
Most of the planet’s population suffers under high inflation currencies and a lack of access to decent banking. Not to mention a government that is actively trying to expropriate (steal) what little assets they’ve scrounged together.
Governments are getting ever more creative and crafty to ensure the theft goes on.
What stablecoins do is offer everyday people access to stable money that can easily and cheaply be transferred to anyone in the world for a very cheap cost. Crucially, the system providing this can be located in any jurisdiction, thereby putting it beyond the reach of the users’ own government.
Thanks to Trump’s GENIUS Act and the growing acceptance of US dollar stablecoins at retailers, they can soon be spent as money in everyday transactions, too.
Here’s a prediction for 2026 for you: you’ll be doing next year’s Christmas shopping using US dollar stablecoins.
Why?
It’s obvious why someone in Africa or Venezuela would like to use US dollar stablecoins.
But consider the implications for their local governments.
We’re talking about a parallel monetary system that is outside the government’s control. It doesn’t know what transactions are being made by its own people. Nor can it enforce the law on those transactions and holdings.
Not without the help of the stablecoin issuer, who is in another country…
People using a foreign country’s stablecoins are immune to local currency inflation and capital controls, too.
Of course, this equation is looking rather enticing to a lot of people in the developed world too. In the UK we’ve experienced double-digit inflation, debanking, and restrictions on our transactions.
If the UK government had imposed the exit taxes it was mulling for its recent budget, US dollar stablecoins would’ve given Brits a backdoor emergency exit for all their wealth…
The tax would’ve raised nothing.
Of course, the US government may have shared the personal financial information of Brits using US dollar stablecoins with the UK tax authorities. Maybe. But at a price.
And not all countries will find the US government as cooperative…
And not all US dollar stablecoins are issued within the jurisdiction of the United States…
Prelude to war
If US dollar stablecoin adoption continues to surge, it will radically change the world as we know it. People will be able to opt out of the financial system of the country they live in. This will destabilise governments and national currencies. It could even cause them to collapse altogether.
US dollar stablecoin issuers will hold complete power over us. Which might sound ominous, but it’s an improvement for most of the people in the world. Besides, they’ll be free to choose which US dollar stablecoin issued in which jurisdiction they want to use.
The trouble is that this change is so radical that it may not be acceptable to the world’s politicians. If Chinese people can suddenly use US dollar stablecoins and their global currency and banking system, it completely undermines the Chinese government. It can’t raise tax revenue without the stablecoin issuer opening its books. And it can’t enforce tax rulings.
This implies the government will collapse. Or go to war first.
The GENIUS Act goes into effect in January 2027, or before if the regulations get finalised in 2026.
But the chaos will begin long before then as the world prices in the consequences.
Until next time,
Nick Hubble
Editor at Large
