Global Money Meets National Regulation: A Tense Convergence

Financial systems are being disrupted by digital currencies, which break traditional geography-based architecture. Unlike physical money, digital currencies like Bitcoin and stablecoins don't care where their owners are located. This has profound implications as we create global money while retaining national regulation.

The tension is emerging between global money and national authorities. Cloud infrastructure, AI models, cyberattacks, and crypto networks are all global, yet governments, central banks, deposit guarantee schemes, insolvency regimes, and financial regulators remain largely national.

This creates a question: who's responsible when global money causes a national crisis? Stablecoins, which turn a country's currency into a globally accessible digital instrument, have become increasingly important. They're becoming a new distribution system for currencies.

The strongest currencies gain an advantage as people in countries with inflation, currency controls, or unstable banking systems opt for digital dollars instead of their domestic currency. This creates an opportunity for the US as dollar stablecoins extend the reach of the dollar deep into the digital economy.