Rodney Prescott, Head of Industry Relations at Zekret, has been closely tracking the implications of the Genius Act, a proposed US regulatory framework for stablecoins that, while aimed at improving accountability and trust in digital currency issuance, may also have far-reaching geopolitical consequences.
“The Genius Act is not much different from a deposit-taking requirement,” Prescott says. At its core, the Act stipulates that issuers of US dollar-denominated stablecoins must maintain liquid reserves, such as US treasuries, to back their tokens. This mirrors traditional banking requirements and is designed to prevent under collateralization and systemic risk in the stablecoin market.
However, Prescott argues that the broader outcome is less about consumer protection and more about extending the global reach of the US dollar. “It’s about giving dominance to the US dollar,” he says. 
By making US-backed stablecoins the regulatory standard, the Act could reinforce dollar primacy in global digital payments. In regions with weak currencies or limited financial infrastructure, the ease of transacting in a regulated, stable dollar-denominated token could significantly displace local monetary systems.
“If US dollar-based stablecoins remain the stablecoin of choice, everyone else’s sovereign monetary policies are basically undermined,” Prescott says.
This could particularly impact emerging markets. Countries like Argentina or Zimbabwe, where inflation or currency devaluation has weakened trust in national currencies, may see accelerated adoption of dollar-based stablecoins. While this might offer users greater purchasing power stability in the short term, it risks further weakening local financial sovereignty.
Prescott also notes the systemic imbalance this approach creates. “If you’re a European startup or an issuer in a smaller market, to issue a dollar-based stablecoin under this Act, you’d need to hold US treasuries and potentially meet US banking requirements. That sets a very high barrier to entry.”
For large entities, such as Binance, Gemini, or even major corporations like Amazon or Google, these requirements may be manageable. But smaller players and governments could be left with limited options for participation or control.
This echoes historical concerns over the so-called “exorbitant privilege” of the US dollar, first voiced by French President Charles de Gaulle in the 1960s, wherein the United States can effectively export dollars, while other countries must earn or buy them. Prescott draws a parallel to this dynamic: “France and the rest of Europe had to earn dollars. The US could just print them. It’s the same model with stablecoins, just digital.”
In summary, the Genius Act brings forward a complex trade-off. On one hand, it introduces clearer regulatory standards and promotes transparency in stablecoin issuance. On the other, it may accelerate global dollarisation through digital channels, posing significant challenges to the autonomy of local monetary systems.
“If Amazon, Walmart, and Google all issue dollar-backed stablecoins, we’re looking at a global payment system tied directly to US treasuries,” Prescott concludes. “That’s not a neutral infrastructure, it’s a geopolitical shift.”
