Future Financial Systems in a Post-Dollar Crisis

The Future of Financial and Monetary Systems in a Post-Dollar Crisis: Time Value, Global Regulatory Coordination, Chinese Debt, Decentralized Cryptocurrencies, and Stablecoins

June 13, 2025

Abstract
The hypothetical scenario of the U.S. dollar decoupling from the international monetary system, coupled with a U.S. Treasury bond collapse, high-debt crises in major economies (China, Japan, Europe), and real estate bubble bursts in China and Japan, poses unprecedented challenges to the global financial architecture. This paper explores the evolution of financial and monetary systems in such a crisis, drawing on the crypto community's use of Manhattan land tokenization as a case study, Bitcoin’s role as a high-liquidity, trustless transaction medium, and the integration of stablecoins as a stabilizing mechanism. It incorporates analyses of China’s $140 trillion debt, time value assessments, decentralized cryptocurrency exchanges for evading regulatory oversight, the potential of decentralized digital currencies to overcome international political complexities, and the role of stablecoins in enhancing stability and trust. Using a field theory perspective, we model the financial system as a dynamic field of interacting economic, technological, and regulatory forces, driving the transition from a dollar-centric system to a multipolar, digitized framework. We argue that tokenized real assets, decentralized cryptocurrencies, and stablecoins can complementarily anchor a new monetary paradigm, addressing liquidity, stability, and deleveraging needs in a fragmented global economy, while navigating political complexities through regulatory coordination and decentralized mechanisms.

1. Introduction
The global financial system, long anchored by the U.S. dollar as the primary reserve currency, faces a potential paradigm shift. A hypothesized dollar decoupling, combined with a U.S. Treasury bond collapse (“debt bomb”) and high debt levels in China (over 300% of GDP, approximately $140 trillion or 450 trillion NTD), Japan (over 250%), and Europe (e.g., Italy and Greece exceeding 150%), creates a vacuum in stable monetary anchors (IMF, 2024). China’s massive debt, encompassing government, corporate, and household sectors, exacerbates risks, particularly amid its real estate crisis. Concurrently, real estate bubble collapses in China and Japan undermine traditional wealth storage mechanisms. The cryptocurrency community frequently cites Manhattan land tokenization as a model for unlocking liquidity in high-value assets, while Bitcoin, decentralized exchanges (DEXs), and stablecoins offer trustless, high-liquidity transaction mediums with enhanced stability. This paper adds time value assessments, evaluates global regulatory coordination in a post-hegemonic world, analyzes decentralized cryptocurrencies’ ability to bypass political complexities, deepens the field theory framework, and incorporates stablecoins as a critical component for mitigating volatility and fostering trust.

Adopting a field theory perspective, we conceptualize the global financial system as a field of interacting economic (debt, liquidity, time value), technological (blockchain, AI, stablecoins), and regulatory (global coordination, regional policies, political complexities) forces. Field theory, rooted in physics and social sciences (Lewin, 1951), models these forces as vectors shaping monetary system evolution, analyzing their dynamic equilibria and tensions. We explore how tokenized real assets (e.g., Manhattan land), cryptocurrencies (e.g., Bitcoin), and stablecoins address stability and liquidity challenges in a post-dollar, high-debt world, drawing insights from their complementary roles, regulatory coordination, decentralized exchanges, political navigation, and stablecoin integration.

2. Background: The Crisis Context
2.1 Global Debt and Monetary Instability
A dollar decoupling, as hypothesized by figures like Jack Mallers, would dismantle its global reserve currency role. Combined with a Treasury bond collapse, it would erode confidence in dollar-denominated assets, triggering market volatility and liquidity crises. High debt levels in major economies render their currencies (RMB, JPY, EUR) unsuitable as stable alternatives:

• China: Total debt in 2025 is estimated at $140 trillion (450 trillion NTD), including government debt (~20% of GDP), corporate debt (~160% of GDP), and household debt (~60% of GDP). Real estate crises (e.g., Evergrande) and local government debt (~70 trillion RMB) exacerbate financial fragility (Reuters, 2023).

• Japan: Public debt exceeds 250% of GDP, with an aging population limiting yen stability (Bank of Japan, 2024).

• Europe: Political fragmentation and high debt in southern states weaken the euro’s global appeal (Eurostat, 2024).

2.2 Real Estate Bubble Collapse
China’s real estate sector, a key economic driver, has faced significant deleveraging since 2021, with asset prices plummeting and developers like Evergrande defaulting, straining local government finances reliant on land sales. Japan, post its 1990s real estate bubble burst, continues to face low growth and high public debt. These collapses diminish real estate’s role as a reliable store of value, necessitating alternative assets.

2.3 Cryptocurrency, Tokenization, and Stablecoin Trends
The cryptocurrency community uses Manhattan land as a tokenization case study, fractionalizing high-value real estate into blockchain-based digital tokens. For instance, the Flatiron Building, auctioned for $161 million in 2023 (The New York Times, 2023), exemplifies assets suitable for tokenization due to stability and global appeal. Bitcoin, with its 21 million coin cap and decentralized nature, offers a trustless transaction medium, as seen in platforms like Strike and other DEXs (Strike, 2024). Stablecoins, such as USDC and Tether (pegged to assets like the dollar or real estate), provide low-volatility alternatives, bridging traditional and decentralized finance by maintaining stable value while leveraging blockchain efficiency.

3. Field Theory Framework: In-Depth Analysis
Field theory posits that systems are shaped by interacting forces within a dynamic field (Lewin, 1951). In the financial context, the global monetary system is the field, with key forces:

• Economic Forces: Debt levels (e.g., China’s $140 trillion debt), asset price volatility, liquidity demands, and time value.

• Technological Forces: Blockchain, smart contracts, AI-driven risk management, decentralized exchanges, and stablecoins.

• Regulatory Forces: Global coordination (e.g., IMF), regional policies, and international political complexities (e.g., geopolitical conflicts, sanctions).

Field Theory Dynamics:

• Vector Field: Economic (E), technological (T), and regulatory (R) forces are vectors with direction and magnitude, interacting to determine field energy (U, system stability). The dollar decoupling and high-debt crises (e.g., China’s debt) increase U’s instability, requiring new anchors (e.g., tokenized assets, stablecoins) and mediums (e.g., Bitcoin, DEXs) to reduce U.

• Tensions and Equilibria:

  • Economic Tension: High debt (e.g., China’s 160% corporate debt-to-GDP) versus liquidity demands elevates Bitcoin’s short-term time value, but tokenized real estate and stablecoins offer long-term stability.

  • Technological Tension: Blockchain’s decentralization (e.g., DEXs, stablecoins) conflicts with regulatory needs (e.g., anti-money laundering), requiring a balance between innovation and security.

  • Regulatory Tension: International political complexities (e.g., U.S.-China trade wars, sanctions) versus global coordination, with decentralized currencies and stablecoins offering a bypass.

• Dynamic Evolution: Crises amplify field tensions, driving reconfiguration. Tokenized Manhattan land and stablecoins provide long-term stability (low U), while Bitcoin and DEXs offer short-term liquidity (high transaction efficiency), forming a new equilibrium. Political complexities (R_politics) increase field entropy, but DEXs’ and stablecoins’ censorship resistance and stability reduce entropy, stabilizing the field.

• Field Theory Model:

  • Equation: U = f(E, T, R), where U is field energy, minimized by stable anchors (E_stable, e.g., tokenized land, stablecoins) and liquid mediums (T_liquidity, e.g., Bitcoin/DEXs).

  • Prediction: Tokenized assets, stablecoins, and decentralized currencies balance stability and liquidity, countering debt crises and political complexities.

4. Potential Valuable Assets and Time Value Assessment

The concept of "all assets having value" refers to the process of tokenization, where various assets—such as real estate, art, bonds, commodities, and intellectual property—are converted into digital tokens on a blockchain. This transformation imbues these assets with market value, enabling them to be traded, fractionalized, or used as collateral. The goal is to enhance the liquidity of traditionally illiquid or indivisible assets, thereby maximizing their value.

Specific Examples:

• Stablecoins: Assets like USDT and USDC tokenize fiat currencies (e.g., USD) and represent the largest segment of the Real World Asset (RWA) market.
• Real Estate: Platforms like RealT enable investors to purchase fractional shares of properties starting at $100, with rental income distributed proportionally.
• Commodities: Gold-backed tokens, such as Tether Gold (XAUT), account for 84% of a $1.9 billion market.
• Intellectual Property: Music royalties or patents can be tokenized, allowing creators to directly raise funds from investors.

In a post-dollar, high-debt crisis, valuable assets require scarcity, stability, liquidity, and global acceptability, evaluated through time value (asset performance across time horizons, incorporating discount rates and risk premiums):

1. Precious Metals (Gold, Silver):

   • Stability and Anti-Inflation: Gold preserves value long-term (high time value, low discount rate).

   • Liquidity: Physical transactions require logistics, limiting short-term liquidity (weak short-term time value).

   • Global Acceptability: Recognized by central banks but less efficient for cross-border transactions.

2. Commodities (Energy, Rare Earths):

   • Real Demand: Essential for industry, stable long-term value (medium time value).

   • Volatility: Prices fluctuate with geopolitics, high short-term risk (volatile short-term time value).

   • Liquidity: Futures markets provide liquidity but rely on traditional systems.

3. Tokenized Core Real Estate (e.g., Manhattan Land):

   • Stability: Scarce urban land retains value long-term (high time value, low discount rate).

   • Liquidity: Blockchain tokenization enables instant trading, boosting short-term time value.

   • Global Acceptability: Requires regulatory support but has high potential.

4. Bitcoin:

   • Liquidity: Trustless, instant global trading, high short-term time value.

   • Volatility: Price swings (e.g., $69,000 in 2021 to $16,000 in 2022) make long-term time value uncertain.

   • Global Acceptability: Accepted in some nations but restricted in others (e.g., China).

5. Stablecoins (e.g., USDC, Tether, Real Estate-Backed):

   • Stability: Pegged to assets (e.g., dollar, real estate), minimizing volatility, high long-term and short-term time value.

   • Liquidity: Blockchain-based, instant trading, comparable to Bitcoin.

   • Global Acceptability: Widely adopted in DeFi and cross-border payments, though regulatory scrutiny varies.

6. Intellectual Property:

   • Long-Term Value: Tech patents have high growth potential (high long-term time value).

   • Liquidity: Negotiation-based sales limit short-term time value. Tokenized real estate, stablecoins, and Bitcoin emerge as top candidates due to complementary stability and liquidity.

5. Manhattan Land Tokenization: Case Study
5.1 Mechanism
Tokenization fractionalizes real estate into blockchain-based digital tokens (e.g., Ethereum). For a $100 million Manhattan property:

• Fractionalization: Split into 1 million tokens at $100 each.

• Smart Contracts: Automate ownership, trading, and yield distribution (e.g., rent).

• DeFi Integration: Tokens can be staked in protocols like Aave for loans or yield farming, or used as collateral for stablecoins.

5.2 Implications

• Liquidity: Tokenization unlocks real estate value, lowering global investment barriers, enhancing short-term time value.

• Stability: Manhattan land retains value amid global debt crises (e.g., China’s $140 trillion debt), offering long-term time value as stablecoin collateral.

• Deleveraging: Tokenized assets provide liquidity to repay debts, addressing China’s real estate crisis or U.S. consumer debt.

• Stablecoin Integration: Tokenized land can back stablecoins (e.g., real estate-backed tokens), ensuring price stability and trust in DeFi ecosystems.

• Field Theory Perspective: Tokenized land and stablecoins act as stable economic vectors (E_stable), reducing field energy U, countering debt-induced volatility. Their interaction with technology (blockchain) enhances liquidity, while regulatory coordination (R) ensures global acceptance.

Can all assets be tokenized and given market value?

While most assets can technically be tokenized, several factors may limit the full realization of "all assets having value":

• Economic Viability: The cost of tokenizing low-value or non-standardized assets (e.g., personal collectibles) may exceed their market value.
• Legal Restrictions: Certain assets (e.g., defense-related assets) may be prohibited from tokenization due to regulatory or security concerns.
• Market Demand: An asset's market value depends on buyer and seller interest, and some assets may lack sufficient liquidity.

6. Bitcoin, Stablecoins, and Decentralized Exchanges as Transaction Mediums
6.1 Bitcoin Advantages
Bitcoin’s decentralized, fixed-supply nature makes it ideal for trustless environments:

• No Credit Checks: Peer-to-peer blockchain transactions eliminate intermediaries, maximizing short-term time value.

• High Liquidity: Global exchanges enable rapid conversion to fiat or stablecoins.

• Cross-Border Utility: Strike leverages Bitcoin’s Lightning Network for instant, low-cost payments (Strike, 2024).

6.2 Stablecoin Advantages
Stablecoins bridge traditional and decentralized finance:

• Stability: Pegged to assets (e.g., USDC to USD, or real estate-backed stablecoins to tokenized land), ensuring low volatility and high time value across horizons.

• Liquidity: Blockchain-based, instant global trading, comparable to Bitcoin.

• DeFi Integration: Widely used in DEXs (e.g., Uniswap) for trading, lending, and yield farming, enhancing trust in volatile markets.

• Case Study: In 2025, USDC and Tether dominate DeFi transactions, with real estate-backed stablecoins emerging as collateral in tokenized asset markets (CoinMarketCap, 2025).

6.3 Decentralized Exchanges (DEXs) for Evading Oversight
Beyond Strike, 2025’s leading DEXs enable transactions bypassing national and traditional financial oversight:

1. Uniswap (Ethereum):

   • Mechanism: Automated Market Maker (AMM) with liquidity pools, no order book.

   • Evasion: No KYC, anonymous wallet-based trading (e.g., MetaMask), transparent smart contracts.

   • Strengths: High liquidity, supports ERC-20 tokens including stablecoins, leading 2025 trading volume (CoinMarketCap, 2025).

   • Limitations: High Ethereum Gas fees, potential wallet address tracking.

2. PancakeSwap (BNB Chain):

   • Mechanism: AMM with low fees.

   • Evasion: No KYC, anonymous trading.

   • Strengths: Cost-effective for small transactions, growing user base (CoinGecko, 2025).

   • Limitations: BNB Chain’s relative centralization, vulnerability risks.

3. SushiSwap (Multi-Chain):

   • Mechanism: Uniswap fork, supports cross-chain trading (Ethereum, Polygon).

   • Evasion: Decentralized governance, no KYC.

   • Strengths: Layer 2 reduces fees.

   • Limitations: Fragmented liquidity.

4. dYdX (Layer 2):

   • Mechanism: Combines order book and AMM on StarkWare.

   • Evasion: v4 fully decentralized, no KYC.

   • Strengths: Low fees, high throughput.

   • Limitations: Complex Layer 2 bridging.

5. Biswap (BNB Chain):

   • Mechanism: AMM with low slippage, high-yield liquidity mining.

   • Evasion: No KYC, anonymous trading.

   • Strengths: Low fees, cross-chain functionality.

   • Limitations: Lower liquidity.

Challenges to Evasion:

• Chain Analysis: Public blockchain transactions enable tracking via tools like Chainalysis.

• Wallet Security: 2025 crypto thefts exceed $2.1 billion due to wallet breaches (CertiK, 2025).

• Regulatory Pressure: Governments may restrict DEX frontends (e.g., U.S. sanctions on Tornado Cash).

• Privacy Solutions: Mixers (e.g., Tornado Cash, controversial) or privacy chains (e.g., Monero) enhance anonymity but carry legal risks.

Field Theory Perspective: Bitcoin, stablecoins, and DEXs act as technological vectors (T_liquidity), reducing field energy U via high liquidity and stability. Stablecoins mitigate Bitcoin’s volatility, enhancing trust, while creating tension with regulatory forces (R_control) due to oversight evasion. Their censorship resistance stabilizes the field against political complexities.

6.4 Limitations

• Bitcoin Volatility: Price swings limit long-term time value.

• Stablecoin Risks: Peg stability depends on collateral quality (e.g., Tether’s reserve transparency issues).

• Regulatory Risks: Bans in countries like China hinder adoption.

7. Potential of Decentralized Digital Currencies and Stablecoins to Overcome International Political Complexities
International political complexities (geopolitical conflicts, sanctions, currency wars) amplify regulatory force (R_politics), increasing field entropy. Decentralized digital currencies (e.g., Bitcoin, Monero), stablecoins, and DEXs offer mechanisms to bypass these:

• Decentralized Nature:

  • No Single Control: Blockchain operates via global nodes, immune to single-government shutdowns.

  • Cross-Border Transactions: Peer-to-peer trading bypasses traditional systems, aiding sanctioned nations (e.g., Venezuela).

  • Case Study: During the 2022 Russia-Ukraine conflict, Bitcoin and USDC facilitated cross-border donations, evading bank restrictions.

• DEX Anonymity:

  • Uniswap, PancakeSwap require no KYC, reducing traceability.

  • Monero uses ring signatures and stealth addresses to obscure transaction details.

• Stablecoin Stability:

  • Pegged to assets (e.g., USDC, real estate-backed tokens), stablecoins reduce volatility, fostering trust in politically unstable regions.

  • Case Study: In 2025, real estate-backed stablecoins gain traction in DeFi, stabilizing cross-border trade (CoinGecko, 2025).

• Censorship Resistance:

  • Blockchain’s public ledger and decentralized nodes ensure transactions cannot be blocked.

  • Case Study: In 2025, Iran and North Korea use DEXs for Bitcoin and stablecoin trading, bypassing dollar sanctions (Chainalysis, 2025).

• Mechanisms for Overcoming Complexities:

  • Currency Neutrality: Decentralized currencies and stablecoins avoid reliance on single-nation currencies, mitigating currency war impacts.

  • Global Participation: DEXs enable global access, reducing geopolitical barriers.

  • Decentralized Governance: DAOs (e.g., SushiSwap) distribute decision-making, minimizing political interference.

• Field Theory Analysis:

  • Political complexities (R_politics) increase field entropy, elevating U. Decentralized currencies, stablecoins, and DEXs (T_decentralized) reduce entropy via censorship resistance and stability, stabilizing the field.

  • Interaction with Economic Forces: Currency neutrality and stablecoin pegs mitigate currency war impacts on E, enhancing liquidity and trust.

  • Interaction with Regulatory Forces: Decentralization weakens R_control, driving the field toward multipolar coordination.

• Challenges:

  • Regulatory Countermeasures: Chain analysis or DEX frontend restrictions.

  • Geopolitical Pressure: Major powers may pressure DEXs or nodes.

  • Technical Dependence: Network or power disruptions (e.g., China’s mining ban) weaken operations.

  • Stablecoin Collateral Risks: Peg failures (e.g., UST collapse in 2022) undermine trust.

  • Market Adoption: Low tech literacy in politically unstable regions limits uptake.

• Opportunities:

  • Financial Autonomy: Decentralized currencies and stablecoins empower economic independence.

  • Sanction Resistance: DEXs and stablecoins promote equitable trade.

  • Technological Innovation: Zero-knowledge proofs (ZKP) and Layer 2 (e.g., dYdX) enhance privacy and efficiency.

8. Complementary Roles of Tokenized Assets, Stablecoins, and Bitcoin
Tokenized real estate, stablecoins, and Bitcoin/DEXs form a symbiotic system:

• Stablecoin Collateral: Manhattan land tokens back stablecoins (long-term time value), while Bitcoin/DEXs facilitate transactions (short-term time value).

• DeFi Ecosystem: Investors stake land tokens for stablecoin loans, using Bitcoin or stablecoins (e.g., USDC) on DEXs for payments, bypassing political oversight.

• Monetary Anchor: Land tokens and stablecoins anchor long-term value, while Bitcoin/DEXs ensure short-term liquidity, filling the post-dollar vacuum.

• Field Theory Perspective: Tokenized land and stablecoins (E_stable) and Bitcoin/DEXs (T_liquidity) balance field energy U, countering debt crises (e.g., China’s $140 trillion debt) and political complexities (R_politics).

9. Global Regulatory Coordination in a Post-Hegemonic World
Without a global economic hegemon, regulatory coordination must overcome fragmentation:

• International Institutions: IMF and G20 set standards for tokenized assets, cryptocurrencies, and stablecoins, addressing issuance, trading, and anti-money laundering. IMF could enhance SDRs to include tokenized assets and stablecoins.

• Regional Alliances: ASEAN, EU promote local asset tokenization with regional frameworks, e.g., EU tax norms for blockchain assets.

• Technology-Driven Transparency: Blockchain ledgers enable auditable transactions, e.g., Manhattan land token and stablecoin trades.

• Multilateral Mechanisms: WTO or new financial alliances coordinate policies to prevent currency wars, e.g., unified cross-border token tax standards.

• Decentralized Currency and Stablecoin Impact: DEXs, Bitcoin, and stablecoins reduce reliance on single regulators, with DAOs as non-state actors in dialogues.

• Field Theory Analysis: Regulatory forces (R) tension with technological forces (T_decentralized), but decentralized currencies and stablecoins weaken R_control, driving the field toward decentralized coordination.

• Challenges: Political divisions, regulatory capacity gaps in emerging markets, and stablecoin collateral risks.

• Opportunities: Blockchain fosters equitable coordination; AI analyzes global financial data for dynamic regulation.

10. Future Financial and Monetary Design
Field theory predicts the financial system’s evolution:

1. Multipolar Monetary System:

   • Tokenized assets and stablecoins (e.g., real estate-backed) as new anchors, with stable long-term time value.

   • Bitcoin and DEXs (e.g., Uniswap) as transaction mediums, with high short-term time value, overcoming political complexities.

   • IMF enhances SDRs to include tokenized assets, stablecoins, and cryptocurrencies.

2. Financial Instruments:

   • DeFi protocols expand to tokenized real estate and stablecoins, enabling loans and yield farming.

   • Derivatives (e.g., land token futures) hedge volatility.

3. Technological Drivers:

   • Blockchain ensures transparency and efficiency.

   • AI optimizes risk management and asset pricing.

4. Regulatory Frameworks:

   • Global standards prevent fraud.

   • Regional alliances promote local tokenization.

5. Deleveraging and Sustainability:

   • Tokenized assets and stablecoins provide liquidity for high-debt economies (e.g., China’s $140 trillion debt).

   • Green finance links tokenized assets and stablecoins to sustainable projects.

11. Challenges and Opportunities
11.1 Challenges

• Regulatory Complexity: Tokenized assets and stablecoins face ownership and tax hurdles.

• Technical Risks: Blockchain vulnerabilities and smart contract bugs.

• Market Acceptance: Trust depends on regulatory clarity, technical maturity, and stablecoin collateral quality.

• Time Value Uncertainty: Bitcoin’s short-term liquidity may be offset by long-term volatility; stablecoins require robust pegs.

• Chinese Debt Risk: $140 trillion debt could trigger systemic crises.

• Political Complexities: Geopolitical tensions limit decentralized currency adoption.

11.2 Opportunities

• Liquidity Unlocking: Tokenization and stablecoins democratize access to assets like Manhattan land.

• Financial Inclusion: Emerging markets gain global investment access.

• Crisis Mitigation: Tokenized assets, stablecoins, and Bitcoin address liquidity and stability needs.

• Regulatory Coordination: Blockchain enhances transparency.

• Decentralized Trading: DEXs and stablecoins overcome political complexities, enhancing autonomy.

12. Conclusion
The collapse of the dollar-centric system, coupled with China’s $140 trillion debt crisis, global high debt, and real estate bubbles, necessitates a radical redesign of financial and monetary systems. Field theory reveals how economic (including time value and Chinese debt), technological, and regulatory forces converge to drive this evolution. Manhattan land tokenization and stablecoins offer stability and liquidity; Bitcoin and DEXs (e.g., Uniswap, PancakeSwap) provide trustless, high-liquidity, censorship-resistant mediums, overcoming international political complexities. Together, they anchor a multipolar, digitized financial system, addressing debt, volatility, and trust challenges. In a post-hegemonic world, global regulatory coordination via international institutions, regional alliances, and technology ensures stability. Success hinges on regulatory coordination, technological advancements, and market acceptance, paving the way for a resilient, sustainable global economy.

References

• International Monetary Fund. (2024). World Economic Outlook. Washington, DC.

• Reuters. (2023). China’s Evergrande files for bankruptcy protection. Retrieved from https://www.reuters.com

• Bank of Japan. (2024). Economic and Financial Report. Tokyo.

• Eurostat. (2024). Government debt in the Euro area. Retrieved from https://ec.europa.eu/eurostat

• The New York Times. (2023). Flatiron Building auctioned for $161 million. Retrieved from https://www.nytimes.com

• Strike. (2024). Lightning Network documentation. Retrieved from https://strike.me

• Lewin, K. (1951). Field theory in social science. New York: Harper & Row.

• CoinMarketCap. (2025). Cryptocurrency exchange rankings. Retrieved from https://coinmarketcap.com

• CoinGecko. (2025). Cryptocurrency exchange trust scores. Retrieved from https://www.coingecko.com

• CertiK. (2025). 2025 Cryptocurrency security report. Retrieved from https://www.certik.com

• Chainalysis. (2025). 2025 Cryptocurrency crime report. Retrieved from https://www.chainalysis.com

Supplement:

Below is an updated analysis of money printing and debt conditions in various countries, particularly considering the impact of the 2025 U.S. tariff negotiations. The U.S. tariff policy (especially under Trump’s second term) significantly influences global economies, monetary policies, and debt structures, particularly affecting major trade partners such as China, the EU, Canada, Mexico, and India. I have integrated the aforementioned data and will further analyze the potential fiscal and monetary impacts on each country under the background of the U.S. tariff negotiations. 

U.S. Tariff Negotiation Background (2025)

• Policy Overview:

• In 2025, the Trump administration implemented the “America First” trade policy by invoking the International Emergency Economic Powers Act (IEEPA) and Sections 232 and 301 of the 1974 Trade Act, imposing high tariffs on multiple countries to reduce the U.S. trade deficit (which exceeded $1 trillion in goods trade in 2023) and boost domestic manufacturing.

• From February to April, the U.S. imposed “retaliatory tariffs” of 25% on Canada and Mexico, up to 145% on China, and 10%-50% on 57 other countries. On April 2, the U.S. announced a “Liberation Day” full-scale tariff policy, which was later paused for 90 days on April 9 (excluding China).

• On May 12, the U.S. and China reached a 90-day temporary tariff reduction agreement: U.S. tariffs on China dropped from 145% to 30%, and China’s retaliatory tariffs fell from 125% to 10%, retaining a 10% base rate.

• On May 23, the U.S. raised tariffs on the EU to 50% due to stalled negotiations, while a deal was reached with the U.K. reducing auto tariffs from 25% to 10%.

• Economic Impact:

• Tariffs are expected to increase federal revenue by $156.4 billion in 2025 (0.51% of GDP), the largest tax hike since 1993.

• Consumers face an average effective tariff rate of 17.8%, the highest since 1934; prices rise 1.7% short term, with households losing an average of $2,800 (2024 USD).

• GDP growth declines by 0.7 percentage points, unemployment rises by 0.4 points.

• From 2026–2035, tariff revenue will add $2.7 trillion to fiscal income, but dynamic losses are estimated at $394 billion.

• High tariffs on China halved its share of U.S. imports (from 14% to 7%), triggering global supply chain restructuring; indirect exports (via Southeast Asia) are less affected.

Overview of Monetary Expansion and Debt by Country (With Tariff Impact)

1. United States

• Money Printing:

• Federal Reserve balance sheet was around $8.9 trillion in 2023. No QE expansion in 2025, but Treasury repo operations (e.g., $10 billion on June 3) indicate monetary support for debt management.

• M2 money supply is about $21 trillion. Rising tariff revenue offers short-term fiscal space, reducing immediate need for printing.

• Debt:

• Federal debt was $33 trillion in 2023 (Debt-to-GDP ≈ 120%). Expected to rise in 2025 due to tariff-induced fiscal stress (projected £41 billion in deficit by 2029).

• Tariff income (2026–2035: $2.7 trillion) offsets part of the deficit. However, retaliatory tariffs increase long-term fiscal pressure.

• Tariff Impact:

• Tariffs push up consumer prices (e.g., clothing/textiles +15%–19%). The Fed may tighten policy to curb inflation, limiting future QE.

• Bond sell-offs (driven by tariff volatility) raise yields, increasing borrowing costs, though international demand remains stable.

2. China

• Money Printing:

• No major QE publicly announced. In 2025, the PBoC focuses on stabilizing the yuan and exports. Tariff shock in April slashed export orders, prompting potential stimulus that could raise money supply.

• Debt:

• Total debt-to-GDP ratio was about 80% in 2023; local government debt ≈ $13 trillion.

• Belt and Road debt repayments (~$35 billion in 2025) add pressure. Though U.S. tariffs dropped to 30%, export revenue remains limited, raising debt risks.

• Tariff Impact:

• Initial tariff shock crushed exports to the U.S.; China pivoted to Southeast Asia markets. Indirect exports cushioned losses.

• Retaliatory tariffs (reduced to 10%) and rare earth export restrictions added leverage. But market access remained closed; negotiations stalled (May 31), risking further escalation and worsened debt structure.

3. European Union

• Money Printing:

• ECB balance sheet stood at €8.8 trillion in 2023. Inflation in 2025 ranged from 1.5%–2.5%; ECB maintained cautious stance with no large-scale QE.

• U.S. tariffs (50% from June 1) increased import costs; ECB may fine-tune policy to stabilize growth.

• Debt:

• Average public debt-to-GDP ≈ 83% (Italy 140%, Germany 66%). U.S. trade barrier added pressure amid green transition and geopolitical spending.

• Tariff Impact:

• EU planned retaliatory tariffs on U.S. goods (€95 billion worth including aircraft, autos). Negotiation breakdown (May 8) worsened fiscal burden.

• Tariffs raised prices by 2.2% (short term), hurting low-income groups and increasing welfare spending—expanding deficits.

4. Japan

• Money Printing:

• BOJ’s balance sheet was ~$7.3 trillion in 2023. With continued yen depreciation and export challenges from the trade war, Japan likely maintains loose policy.

• Debt:

• Debt-to-GDP ≈ 255%. Mostly domestically held, reducing external risk. Yet global trade contraction may shrink export revenue, increasing fiscal pressure.

• Tariff Impact:

• Internal friction (among Finance Ministry, METI, and USTR) delayed U.S.–Japan tariff talks. Japan’s auto industry strained by 10% base tariffs.

• Yen depreciation + tariff-driven import costs may stoke inflation and debt risk.

5. United Kingdom

• Money Printing:

• BOE balance sheet ~£1.2 trillion in 2023. Inflation peaked at 3.7% in 2025; price pressure from tariffs may restrict monetary easing.

• Debt:

• Debt-to-GDP ≈ 100%. Deficit exceeded expectations in 2025. Tariff revenue adds short-term relief, but economic slowdown may worsen debt long term.

• Tariff Impact:

• May 8 U.S.–U.K. tariff deal cut auto tariffs to 10%, easing fiscal pressure. However, the global trade war (especially EU’s 50% tariff) indirectly impacts U.K. exports.

6. Singapore

• Money Printing:

• MAS manages policy via exchange rates; money supply remains stable. Trade war challenges export-led economy but no obvious QE need.

• Debt:

• Debt-to-GDP ≈ 160%. Fiscal posture is sound, though trade barriers may lower export revenue, slightly increasing debt pressure.

• Tariff Impact:

• As a re-export hub, Singapore is indirectly hit by the U.S.–China trade war. Supply chain restructuring raises costs, but flexible policy helps mitigate shocks.

Summary Table: Major Economies – Money Printing & Debt (with 2025 U.S. Tariff Impact)

Country/Region	Money Supply (M2 or Balance Sheet)	Public Debt / GDP	2025 Tariff Impact
U.S.	M2 ≈ $21T (2023)	~120%	Tariff revenue +$156.4B, prices +1.7%, deficit & borrowing costs rise
China	No public QE data	~80%	Export loss from tariffs; stalled talks may worsen debt risk
EU	ECB ≈ €8.8T (2023)	~83%	50% tariff  +2.2% inflation; fiscal pressure from retaliation
Japan	BOJ ≈ $7.3T (2023)	~255%	Yen + tariffs increase costs, inflation, and fiscal strain
U.K.	BOE ≈ £1.2T (2023)	~100%	U.S. tariff deal relieves pressure; global trade war still impacts exports
Singapore	Stable money supply	~160%	Supply chain realignment increases costs, exports pressured

Analysis & Conclusion

• Money Printing Impact:

The U.S. tariff war raises global prices, prompting some countries (e.g., China, EU) to consider expanding money supply to stimulate growth. However, inflation constraints limit QE. The U.S., aided by tariff revenue, may reduce short-term printing but could face tightening later if inflation persists.

• Debt Impact:

Tariffs lead to trade contraction and retaliation, lowering export revenues and increasing debt-to-GDP ratios (especially in China and the EU). The U.S. deficit worsens under trade war costs; rising bond yields increase borrowing costs.

• Negotiation Uncertainty:

The 90-day U.S.–China tariff truce provides temporary relief, but fragile progress and upcoming deadlines raise the risk of renewed escalation.