United States backs stablecoins to replace petrodollar
- Treasury relies on T-bill-backed stablecoins to absorb surging American debt as bondholders reject long-term yields.
- Emerging regional power blocs and Middle East conflict are dismantling the legacy petrodollar settlement system.
- Automated AI software agents will drive future dollar demand by settling micro-transactions exclusively on stablecoin rails.
The petrodollar is dying, but greenback dominance is not.
The legacy financial architecture cracked on September 4, 2026, as 10-year U.S. Treasury yields surged to 4.76 percent and 30-year yields reached 5.24 percent. On Simon Dixon Hard Talk, host Simon Dixon tracked how rising global yields threaten bank balance sheets while Japan's 10-year yield hitting 3 percent drained cheap capital from American debt. Investors fled sovereign debt for tangible assets, pushing gold past $4,500 an ounce and Bitcoin above $81,000.
The next day on TFTC, analyst Michael Every outlined Washington's deliberate monetary pivot to counter this bond strike. Treasury Secretary Scott Bessent is shifting away from long-term bonds to flood short-term T-bills into stablecoin reserves, forcing international trading partners to absorb national debt. Bypassing legacy bank rails allows the U.S. to export high dollar yields abroad while keeping domestic borrowing costs manageable for industrial re-shoring.
"Rate cuts cannot refine fuel."
- Michael Every, TFTC: A Bitcoin Podcast
That industrial re-shoring faces severe physical bottlenecks. Every pointed out that damaged Middle Eastern refineries will take years to rebuild, keeping transport costs elevated regardless of Federal Reserve interest rate moves. With Russia coordinating with Iran near the Strait of Hormuz, Washington is abandoning free-market orthodoxies to take direct equity stakes in domestic tech and critical mineral firms.
By September 7, 2026, the strategic picture broadened on BTC Sessions. Macro analyst Brent Johnson described a structural shift into "Fortress North America," where Washington trades constitutional limits for geopolitical survival in a bilateral contest against China.
"The post-war rules-based order is dead."
- Brent Johnson, BTC Sessions
This new imperial posture relies on technological lock-in rather than diplomatic consensus. Johnson argued that autonomous AI agents will soon handle continuous machine-to-machine transactions over friction-free stablecoin rails. Rather than undermining state power, crypto rails are poised to expand global dollar velocity and lock software architectures into greenback dominance.
The petrodollar served its era by forcing global energy markets through Western commercial banks. Its successor promises to be faster, more direct, and programmed directly into digital infrastructure.
Source Intelligence
- Deep dive into what was said in the episodes
They’re Not Saving the Republic, They’re Building Fortress North America | Brent Johnson • Sep 7
- The post-World War II rules-based order is ending as the US shifts to bilateral, America-first negotiations. Brent Johnson points to massive capital inflows as evidence of US strength, with the net international investment position shifting over ten years.
- The US is actively constructing a regional bloc termed Fortress North America by integrating economically with Canada and Latin America. Brent Johnson argues this strategy secures critical supply chains and resources while letting the US project power globally.
Also discussed on this episode: (6)
War (1)
- Brent Johnson argues the military conflict in Iran is not a US planning failure but a calculated, long-term strategic action. While costly, the disruption imposes a multi-decade recovery burden on Iran rather than signaling the end of US hegemony.
Macro (2)
- Rising US Treasury yields contract global liquidity by devaluing the sovereign bond collateral held on central bank balance sheets. Brent Johnson argues this global collateral squeeze, rather than US bankruptcy, is the primary threat to the system.
- Scott Bessent designed the US Treasury long-end buybacks as a proactive debt-management tool to insulate thinly traded markets from passive-flow volatility. Brent Johnson notes Bessent's career history includes originating the famous 1990s trade that broke the Bank of England.
Diplomacy (1)
- Brent Johnson predicts the United States will transition into an authoritarian empire rather than cede global hegemony to China or the BRICS nations. Domestic citizens will likely accept increased state authority to preserve their existing standards of living.
AI Infrastructure (1)
- Artificial intelligence has become a core element of national security in the great power competition between the US and China. Brent Johnson expects the US government to heavily subsidize data centers and infrastructure to win this technological race.
Stablecoins (1)
- Stablecoins will serve as the native transactional currency of the 24/7 agentic AI economy, according to Brent Johnson. This massive digital utility entrenches global US dollar dominance while legitimizing foundational digital assets like Bitcoin.
Marty Bent
#789: Stablecoins Are Replacing the Petrodollar with Michael Every • Sep 5
- Under a return to economic statecraft, the United States government secures equity stakes in critical tech and mineral companies. These non-monetized stakes guarantee the government a seat at the table to prevent offshoring.
- Every expects the United States to escalate economically against Iran after the midterm elections. Concurrently, Russia may conduct gray-zone attacks against NATO or launch massive winter missile strikes to break the Ukrainian economy.
Also discussed on this episode: (7)
Models (1)
- OpenAI's announcement of artificial general intelligence capabilities represents a Manhattan Project milestone where machines can self-improve. Marty Bent notes that Astro 6 is marketed at 98 percent AGI, compared to Sol 5.6 at 7.8 percent.
War (1)
- Michael Every argues the United States always targeted Iran but wanted to delay major escalation until 2027. Instead, Russia is actively backing Iranian-led military efforts to divert Western focus away from the Ukraine war.
Trade (1)
- The Netherlands Scientific Research Council for Government Policy argues Europe must abandon its neoliberal trade rules. The council suggests pushing the renminbi down to three or four per dollar, or mirroring China with tariffs and capital controls.
Inflation (1)
- Severe global diesel and refined product shortages act as a structural driver of inflation. Every notes that building new refineries takes five to ten years, meaning inflation remains structural unless the United States forces a kinetic peace.
Stablecoins (1)
- Every suggests the United States could leverage dollar stablecoins backed by T-bills to capture offshore liquidity. This strategy would create a petro-stablecoin system, allowing the US to fund its budget and defense spending externally.
China (1)
- Every notes that automation in China is driving massive industrial layoffs. The Washington Post reports that 350 million of China's 750 million labor force will soon work as gig laborers, while one-third of Chinese firms lose money.
Europe (1)
- European policymakers are targeting citizens' savings accounts to fund domestic infrastructure and industrial re-investment. These desperate measures reflect Europe's massive trade deficit with China and a total lack of global economic leverage.
India, China & Iran Just Sent a Major Signal — BRICS Is Next | Simon Dixon Hard Talk LIVE - 4 September 2026 (Part One) • Sep 4
- The US Strategic Petroleum Reserve has been drained to 287 million barrels, its lowest level since 1982. Simon Dixon explains this drawdown was used to temporarily suppress oil prices while China accumulated the largest oil reserves in the world.
- Simon Dixon argues the upcoming BRICS summit on September 12 and 13 represents a political realignment into regional economic nodes rather than a currency launch. He points to India's cooperation with China and Iran at the SCO meeting as evidence.
Also discussed on this episode: (9)
Macro (2)
- Simon Dixon argues that US Treasury yields reflect critical stress, with 10-year yields at 4.76 percent and 30-year yields at 5.24 percent. He states that yields above 4.5 percent indicate severe stress driven by fiscal dominance.
- Japan's 10-year bond yield rose to 3 percent, its highest level since 1996, indicating a decoupling of Bank of Japan policy from the Federal Reserve. Simon Dixon notes this shift stops investors from borrowing at zero percent to buy US Treasuries.
BTC Markets (1)
- Global assets are rising as the dollar weakens, with gold pushing past $4,500 and Bitcoin trading above $81,000. Simon Dixon states the S&P 500 is nearing its all-time high of 7,748 as inflation forces capital into equities.
War (1)
- US military forces are scheduled to withdraw from Iraq by September 30. Simon Dixon views this withdrawal as a transition from military dominance to economic control, leaving Iraq's central bank managed under US Federal Reserve and SWIFT rails.
Diplomacy (3)
- Saudi Arabia, Turkey, and Pakistan have established the Mecca Agreement to build a regional security alliance. Simon Dixon says this alliance pools Saudi Arabia's financial assets, Turkey's manufacturing base, and Pakistan's nuclear-backed military capabilities to replace US security umbrellas.
- President Xi Jinping's visit to Egypt, his first in a decade, marks Egypt's strategic pivot toward the East. Simon Dixon highlights Huawei's proposal to build an AI data center infrastructure in Egypt as a move to build local technological autonomy.
- The US removed Syria's state-sponsored terrorism classification after President Assad stepped aside for a Gulf-backed leadership transition. Simon Dixon claims this deal allows Western financial institutions to integrate Syrian markets into World Bank and SWIFT rails for reconstruction.
Energy (1)
- Donald Trump's claimed oil deal securing 65 billion barrels in Venezuela is politically exaggerated. Simon Dixon states only 10 to 15 percent of that crude is actually recoverable, and the operation serves to dollarize the country using stablecoins.
Custody (1)
- The Netherlands is transferring 86 tons of gold reserves from North America to London. Simon Dixon warns this custody move is risky, noting that Venezuela still cannot recover its 31 tons of gold currently frozen at the Bank of England.