Group 1 - The "Big and Beautiful" Act is projected to increase the US deficit by $3.4 trillion over the next decade, potentially resulting in 10 million Americans losing health insurance [1] - The Act extends the tax cuts from the Tax Cuts and Jobs Act and raises the US debt ceiling by $5 trillion, indicating a significant increase in government debt [1] - Fitch Ratings has downgraded the outlook for 25% of US industries to "deteriorating," which is a sign of potential economic recession [1][2] Group 2 - The "Genius Act" aims to support the US debt market by mandating stablecoin issuers to purchase short-term US Treasury bonds, creating a closed loop of "dollar-stablecoin-Treasuries" [2] - The global stablecoin market is expected to exceed $2 trillion by 2030, with a significant portion potentially backing short-term US Treasuries, which could help absorb the increased US debt [2][4] - The "Big and Beautiful" Act's strategy of increasing tariffs while reducing taxes aims to attract foreign investment and stimulate economic growth, but faces significant internal contradictions [2][3] Group 3 - The US federal debt-to-GDP ratio is expected to rise from 123% in 2024 to at least 132%, raising concerns about the sustainability of US debt [3] - The timing of tax increases and decreases creates structural contradictions, as external tax revenues have not materialized while internal tax cuts and spending increases are immediate [3] - The Act's tax cuts disproportionately benefit corporations and the wealthy, potentially exacerbating social divides and undermining economic growth [3][4]

Core Viewpoint - Stablecoins are emerging as an unexpected ally in reinforcing the dominance of the US dollar amidst global de-dollarization discussions, with significant implications for international finance and economic sovereignty in Europe [1][13]. Group 1: Stablecoin Market Dynamics - The total value of stablecoins in circulation has surpassed $200 billion, with monthly transaction volumes reaching several hundred billion dollars, providing a digital alternative to traditional currencies [2]. - Deutsche Bank's research indicates that stablecoins have evolved from niche tools to mainstream financial infrastructure, with the market size projected to grow from $20 billion in 2020 to $246 billion by May 2025 [6]. - The transaction volume of stablecoins has increased by 598% since 2020, with 2024 projections estimating $27.6 trillion in transactions, surpassing traditional payment giants like Visa and Mastercard [8]. Group 2: European Concerns - The widespread adoption of dollar-pegged stablecoins in Europe poses a threat to the European Central Bank's ability to manage the eurozone economy, potentially undermining monetary policy effectiveness [2]. - Concerns arise regarding financial stability risks, as European businesses and households earning in euros but transacting in dollar stablecoins may face currency mismatches if the euro depreciates [2]. - The limited market share of euro-pegged stablecoins, which account for only 0.24% of the total stablecoin market, results in higher transaction costs and reduced liquidity [3]. Group 3: Regulatory Environment and Adoption - The regulatory landscape for stablecoins differs significantly between the EU and the US, with the EU's MiCA regulations imposing strict controls, while the US lacks comprehensive legislation, fostering innovation and expansion [5]. - Major companies like Visa, Shopify, Gucci, and PayPal are increasingly adopting stablecoins for transactions, indicating a shift towards mainstream acceptance [10][11]. - A Visa survey revealed that users prefer stablecoins over traditional banking due to higher yields (45%), greater efficiency (41%), and lower intervention risks (39%) [11]. Group 4: Strategic Asset and Dollar Dominance - Stablecoins are becoming strategic assets, with 83% pegged to the US dollar, and Tether being one of the largest holders of US Treasury securities [12][14]. - The demand for reserve assets is evident, with Tether's reserves projected to grow significantly, reinforcing the dollar's position in the global economy [14]. - The potential passage of the GENIUS Act could lead to a tenfold increase in stablecoin supply by 2028, further entrenching the dollar's dominance in the foreign exchange market [15].