Bitcoin Policy Institute proposes five-point plan to secure US stablecoin dominance

BPI unveiled a five-part plan to secure US “stablecoin supremacy.” The blueprint, published Wednesday, builds on the GENIUS Act and targets offshore dollar risks and China’s digital rails (BPI policy proposal).

At its core, BPI argues regulated stablecoins can extend US oversight into offshore dollar markets and cut systemic risk. The institute ties this to curbing China’s digital push and protecting US financial sovereignty (BPI paper).

Under the GENIUS Act, issuers must hold 100% reserves in T‑bills, Treasury repo, or insured deposits, and cannot lend against them. BPI says that shifts Treasuries backing dollar claims back onto US‑regulated balance sheets when foreigners hold compliant stablecoins instead of Eurodollar deposits, easing the “external vulnerability” side of the Triffin dilemma (BPI paper).

BPI warns the US faces competition. It cites an interest‑bearing digital yuan and China’s CIPS reach across 190 countries, and notes Europe’s MiCA as a maturing regime for euro stablecoins (BPI analysis).

What BPI proposes:

• Harden GENIUS implementation with a backstop: committed repo lines with primary dealers and a path to Fed Standing Repo Facility access to make compliant stablecoins more attractive than offshore alternatives (BPI blueprint).
• Export stablecoins for trade settlement to pull Treasury demand onshore and remove the offshore credit multiplier on marginal dollar flows (BPI blueprint).
• Use fees and rewards so regulated stablecoins can compete with interest‑bearing Eurodollars and China’s e‑CNY while staying within GENIUS’s interest prohibition (BPI blueprint).
• Contain DeFi credit multiplication with smart‑contract‑level limits and enforcement chokepoints to stop unregulated protocols from recreating the Eurodollar multiplier on‑chain (BPI blueprint).
• Preserve foreign currency sovereignty by supporting local monetary systems alongside stablecoin use to make integration developmental, not coercive (BPI blueprint).

BPI says this path does not require new sovereign debt to foreign governments or an expanded Fed balance sheet (BPI paper).