USDT, a dollar-pegged stablecoin, has effectively created a parallel financial layer that operates beyond the reach of traditional U.S. oversight. Sofia Glavina, head of the Digital Economy program at the Faculty of Economics at RUDN University, explains that this instrument does more than track the dollar’s value. It functions as a network that can facilitate cross-border transfers, settlements, and a range of financial activities outside conventional clearinghouses and regulatory channels. For observers, USDT represents a distinct economic space where the dollar’s purchasing power is mirrored in a digital form that can move quickly across borders, sometimes bypassing the filing and monitoring requirements that come with ordinary currency flows. The emergence of such a system raises questions about how monetary sovereignty is maintained when a large slice of global liquidity can flow through tokens that do not depend on a central bank or a single national regulator. Glavina notes that while the stability mechanism is anchored to the dollar, the governance and oversight around USDT are more dispersed and less predictable than those of traditional fiat money. She adds that the rapid settlement networks and the flexibility of digital rails create incentives for businesses to use this instrument, especially in regions where conventional banking is slow or costly.
Industry observers describe the so called underground dollar as a tool for sanctions evasion and a mechanism to move value with less exposure to official scrutiny. In Glavina’s view the appeal lies in the ability of semi-decentralized rails to bypass some compliance hurdles that slow down international deals. In practice this can speed up cross-border settlements while allowing participants to operate with a degree of privacy that is hard to obtain through standard banking channels. But risks are clear. Critics warn that privacy can blur the line between legitimate business and illicit activity, increasing the chances of money laundering and opaque flows that complicate global surveillance. Regulators face a challenge to balance the need for effective enforcement with the desire to support innovation in payments. The debate centers on how much sovereignty nations want to grant to digital instruments that run on shared networks and public ledgers. Industry participants argue that stronger know your customer practices and international information sharing can reduce risk without strangling growth.
Indirect data point to metallurgical companies using USDT to pay partners in China, a market where authorities cracked down on crypto activity as early as 2021. In that year China banned all cryptocurrencies, including stablecoins, yet some firms still pursue digital settlement rails to shorten settlement times and cut costs in cross-border trade. Glavina notes that for players tied to global supply chains, the ability to move funds quickly across borders provides a practical edge when traditional routes encounter frictions such as currency controls or volatile exchange rates. The result is a layered payment landscape in which conventional letters of credit and bank transfers continue to play a central role, while digital tokens offer an alternate route that can operate alongside established methods. In these settings the line between regulated and unregulated activity becomes less clear, pushing regulators to rethink how to supervise evolving payment technologies.
From a policy perspective, the rise of stablecoins that operate independently of central banks raises questions about monetary sovereignty and the transmission of policy signals. While the dollar remains the dominant reserve currency, USDT and similar assets have already attracted substantial international liquidity and trading interest. If oversight does not keep pace with adoption, some observers warn that distortions in cross-border pricing, capital flows, and policy effectiveness could emerge. North American and European regulators are weighing options for oversight that emphasize reserve transparency, custodial arrangements, auditability, and consumer protection. The goal is to strike a balance that preserves the benefits of faster, cheaper settlements while reducing the potential for misuse. In practical terms this means clear standards for collateral, mint and burn rules, and cross-border reporting, alongside robust monitoring to detect illicit activity and protect users.
In a BRICS context, Sergei Shoigu, the secretary of the Russian Federation Security Council, stressed at a meeting of high representatives that asset freezes faced by central banks illustrate the pressure to move away from dollar dominated settlements. The shared concern across major economies is to diversify away from a single currency system and to build more resilient payment pathways. On the political stage former U.S. president Donald Trump has suggested that efforts to curb the dollar’s dominance could be seen as attempts to undermine the world’s monetary anchor. The discussion highlights how geopolitical tensions, sanctions, and technological evolution intersect in shaping the future of international money and how countries might shield themselves from sudden shifts in exchange-rate regimes and cross-border finance.