From Stablecoins to Sovereign Individuals: The Digitalization of Dollar Hegemony and the Transformation of State Forms

The financial revolution in the digital age is unfolding, with its core being the authorization of stablecoin issuers by the United States through the "Genius Act", constructing a USD-dominated global financial system based on public blockchain. This strategic initiative will not only reshape the global currency landscape but may also disrupt the traditional concept of national sovereignty.

I. The Rise of the Digital East India Company

The "Genius Act" is essentially a charter granted to the "New East India Company" of the 21st century. These recognized stablecoin issuers, such as Circle, will become agents of the U.S. financial strategy, controlling the global trade routes of the new era - a 24/7 operational cross-border digital financial network.

Similar to the historical East India Company, these companies will play a key role in promoting dollar hegemony and U.S. foreign policy. However, as their influence grows, it may also come into conflict with national sovereignty, replaying the history of the East India Company's game with the British government.

2. Super Dollarization and the End of Non-US Central Banks

Stablecoins will trigger an unprecedented wave of "super dollarization." For countries with fragile credit, citizens can easily convert their local currency into dollar stablecoins, which will accelerate the depreciation of the local currency, lead to the evaporation of the tax base and fiscal collapse, ultimately destroying the governance capacity of these countries.

At the same time, the stablecoin system may also challenge the independence of the Federal Reserve. A privately issued digital dollar system regulated by the Treasury Department will provide the executive branch with a tool to bypass the Federal Reserve's influence on monetary policy.

3. The United States' "Free Financial System" Against China

The "Genius Act" is a key step for the United States in its game against China. The United States is building an open, public blockchain-based financial network, in stark contrast to China's closed, state-led digital yuan. This asymmetric strategy leverages the opponent's fear of losing control, attracting global innovators and users to join the dollar-dominated ecosystem.

IV. The "Denationalization" of Assets

Stablecoins are just the beginning of the revolution. Real-world assets on the chain (RWA) will allow various assets such as stocks and real estate to flow freely on a global public ledger, fundamentally severing the connection between assets and the jurisdiction of specific countries. This will disrupt the traditional banking-centered financial system and achieve the "denationalization" of assets.

V. The Rise of Sovereign Individuals and the Decline of the State

When capital can flow across borders without restriction, and assets can be detached from judicial jurisdiction, we will usher in a new era dominated by "sovereign individuals." The most creative individuals can easily allocate wealth globally and instantaneously transfer it across different jurisdictions using stablecoins. This will significantly undermine the tax capacity and ruling foundation of nations.

With the maturity of privacy technology, future financial transactions may achieve complete anonymity and untraceability. This poses the ultimate challenge to national tax capabilities and could lead to a state transforming into a "nanny state" that only provides welfare to those unable to enter the global digital economy.

The revolution sparked by stablecoins is fundamentally changing the form of power, and its impact may surpass that of the French Revolution. We are standing at the dawn of the disintegration of the old world and the emergence of a new order, a new world that will grant individuals unprecedented freedoms but will also bring unimaginable challenges.