By passing the GENIUS Act, the US has signaled its dedication to constructing a stablecoin-based financial system. Via this initiative, it goals to strengthen the worldwide dominance of the greenback. Nonetheless, Yanis Varoufakis views it as a recipe for catastrophe.
In an unique interview with BeInCrypto, the Greek economist and former finance minister warned that the laws may set off a monetary disaster much more extreme than in 2008. Towards this backdrop, he argues that China’s extra state-controlled and disciplined method to financial energy is best positioned to prevail.
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Washington’s Stablecoin Energy Play
For the reason that finish of the Bretton Woods period, the US has maintained its international dominance largely via monetary energy and greenback supremacy.
Nonetheless, this dominance, as soon as supported by a strong industrial base, has developed as America’s manufacturing capability has declined. In the present day, Washington’s affect rests as a substitute on two pillars: Silicon Valley’s command of Huge Tech and the greenback’s management over worldwide funds.
This capacity to route most international transactions via the US monetary system offers Washington immense leverage. It permits the nation to impose sanctions, finance deficits at low value, and preserve its geopolitical affect.
“If you want to send money from anywhere to anywhere, you have to go through the dollar system… That’s why [the US is] using sanctions as a weapon against anybody that they don’t like, for better or for worse,” Varoufakis instructed BeInCrypto, including, “It’s the hegemony of the dollar that makes America not great, but strong. And they know that if they lose that, they’re finished.”
Now, in a bid to strengthen its greenback dominance, the US is popping to stablecoins.
A New Technique for Greenback Management
In November 2024, American economist Stephen Miran—a detailed ally of Trump and now a member of the Federal Reserve Board—launched an financial framework often known as the Mar-a-Lago Accord.
At its core, the plan entailed a managed devaluation of the greenback to scale back commerce deficits and revive US manufacturing, whereas sustaining the forex’s function because the world’s reserve normal.
“On one hand, [Miran] wants to reduce the exchange value of the dollar. On the other hand, he wants to keep the dollar as the main payment system in the world,” Varoufakis defined.
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🛃🔙 Almost a yr after Stephen Miran launched the thought of a “Mar-a-Lago Accord” — a coordinated effort to engineer a managed USD devaluation — the idea feels extra related than ever.
📊 As our new 𝐈𝐆𝐖𝐓 𝐂𝐡𝐚𝐫𝐭𝐛𝐨𝐨𝐤 𝟐𝟎𝟐𝟓 exhibits, historical past rhymes: each main… pic.twitter.com/iwWof5JxvP
— In Gold We Belief (@IGWTreport) November 3, 2025
The GENIUS Act aligns intently with this imaginative and prescient. By supporting a regulated stablecoin financial system, it successfully extends greenback dominance, reinforcing America’s financial energy via crypto-based infrastructure quite than conventional banking.
Nonetheless, in response to Varoufakis, this method is dangerously short-sighted.
When Stablecoins Turn out to be Systemic Hazard
By permitting banks and personal issuers to construct and pilot the stablecoin financial system, Varoufakis warned that it reinforces the very dynamic that has lengthy outlined the American system– a authorities dictated by Wall Avenue.
“We know that the Federal Reserve is not an independent central bank. It’s independent of the American people and Congress, but it is totally dependent on JPMorgan and Goldman Sachs… Its role is to do a little bit of regulation, nothing that annoys Wall Street too much,” Varoufakis defined.
The deepened privatization of financial energy, he argued, is a recipe for systemic fragility.
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If a significant stablecoin have been to break down—via mismanagement, hypothesis, or a disaster of confidence—the results would ripple throughout borders. International economies utilizing dollar-backed tokens would haven’t any recourse, since they can not print {dollars} to stem the panic.
“As we speak, there are Malaysian companies, Indonesian companies, and companies here in Europe that increasingly use Tether… which is a huge problem. Suddenly, these countries… end up with central banks that do not control their money supply. So their capacity to effect monetary policy diminishes and that introduces instability,” Varoufakis added.
Such a failure may unleash a sequence response paying homage to the Nice Recession. Varoufakis warned that this may quantity to a self-inflicted international disaster—pushed by America’s effort to digitize and outsource its monetary empire to the very establishments that when pushed it to the brink of collapse.
“Just like in 2007-8, when the whole thing goes pear-shaped, there will be second and third generation effects that will have negative repercussions in the United States. So I think that this is going to be the next financial crisis coming out of the stablecoin market.”
In distinction, China has constructed a state-coordinated monetary and technological ecosystem designed to forestall exactly such instability.
China’s Managed Capitalism Pays Off
Whereas the US authorities solutions to Wall Avenue, Chinese language bankers and tech leaders reply to the state, in response to Varoufakis. Personal corporations are allowed to revenue, however they function inside strict limits set by the federal government.
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“You may call this authoritarianism, I call it prudent,” he stated.
Varoufakis described China’s integration of Huge Tech and finance as notable. Platforms comparable to WeChat Pay and the digital yuan have established a unified and environment friendly cost community working beneath state supervision.
China’s share of the world’s manufacturing worth added has rocketed to 33% whereas the West has tumbled down.
“China’s Lu Feng sees the US-China rivalry ultimately as a contest between two systems: China’s “industrial socialism” and America’s “financial capitalism”.
” The US was… pic.twitter.com/xL7Hy7HyM7
— Michael Dunne (@dunne_insights) June 19, 2025
Against this, the US can’t simply replicate this mannequin, as Wall Avenue stands firmly in the way in which. Integrating digital funds with credit score and banking would undermine its management over the monetary system.
“You may recall that Mark Zuckerberg some time ago tried to introduce his own Facebook cryptocurrency and he was smacked down by Wall Street with the help of the Fed,” Varoufakis defined.
He doubled down on this distinction by arguing that the US has superior expertise however no clear path, leaving non-public monopolies to dominate. Because of this, it stays technologically robust however politically stalled, unable to modernize or construct successfully.
“To me, the Chinese have got it right, and the United States have got it… sensationally wrong… I believe that if Adam Smith was alive today, the guru of free market capitalism, he would have agreed with what I’m saying. He would have been aghast with what’s going on in Washington and New York,” Varoufakis emphasised.
In his view, this distinction will outline the approaching battle for international financial energy—and in the end decide which system survives.
