According to Mateusz Kara, CEO of the prominent European crypto payments company Ari10, President Donald Trump’s endorsement of stablecoins may pivot more on financial engineering than on genuine blockchain advancement.
The introduction of USD1, a new stablecoin pegged to the dollar and backed by President Trump and his family, may seem like another stride toward mainstream crypto adoption, particularly considering his visible support for the sector. However, for Kara, this stablecoin is indicative of a much more significant trend: an American-led initiative to redefine global debt markets.
“I find it hard to believe in Trump’s newfound enthusiasm for stablecoins and blockchain,” Kara remarked in a statement. “The actual intention behind fortifying the stablecoin market is to create a fresh, receptive environment for U.S. bonds worldwide.”
Kara explains that the mechanism is both straightforward and powerful. To generate stablecoins like USD1, platforms will need to acquire U.S. dollars and short-term treasuries, thus establishing a new decentralized channel for distributing global bonds.
“This represents a new mechanism for dollar expansion,” he elaborated. “It will facilitate lower borrowing costs for the U.S. by increasing demand for its debt instruments.”
USD1 enters a competitive arena
Launched on March 25 by World Liberty Financial, a decentralized finance venture linked to the Trump family, USD1 is supported on a 1:1 basis by U.S. treasuries, cash equivalents, and deposits. It will operate on both the Ethereum and Binance Smart Chain networks. The initiative has already secured over $500 million in backing and boasts 85,000 verified users, as reported by CNBC.
This new arrival finds itself in a rapidly expanding stablecoin market that has surged over 46% in the past year, with competitors like Tether, Circle, PayPal, and Ripple vying for market leadership. Treasury Secretary Scott Bessent recently indicated that stablecoins will play a critical role in maintaining “the U.S. as the prevailing reserve currency.”
Implications for Europe
Kara sees the launch of USD1 as a wake-up call for European markets.
“Europe must enhance its euro-based stablecoin framework,” he stated. “If not, dollar-denominated stablecoins will dominate the digital financial landscape.”
He also stressed the importance of regulatory advancements, such as the EU’s MiCA framework, in fostering a safer and more competitive climate for stablecoin innovation. Amid recent hacks and exchange controversies that have weakened investor trust, Kara believes that regulatory measures can provide the assurance and transparency necessary for rebuilding confidence.
In essence, USD1 may represent less of a tool for crypto utility and more of a form of soft power. By embedding dollar-backed stablecoins into the global financial architecture, the U.S. could forge a novel avenue for debt distribution, bypassing traditional banking and extending the influence of the dollar in a programmable, borderless manner.
Kara warns that Europe’s response to this challenge hinges on its speed of action.
“Stablecoins have transcended their crypto origins,” he said. “They are evolving into instruments of global monetary strategy.”