Satoshi Nakamoto's vision completely shattered! Bitcoin and stablecoins have become tools of US dollar dominance

Bitcoin has been around for fifteen years since its inception, with the market swelling to nearly $4 trillion in size, but most of the original vision of daily payments envisioned by Satoshi Nakamoto has largely fallen short. The market’s hope for peer-to-peer payments has shifted to stablecoins; however, as regulations tighten with acts like the U.S. GENIUS Act and Europe’s MiCA Act, stablecoins have not replaced banks but instead become a form of banking infrastructure, risking evolution into the next SWIFT, serving institutional channels rather than financial inclusion tools.

Bitcoin’s Transition from Payment Tool to Speculative Asset

(Source: Dash)

In 2008, Satoshi Nakamoto released the Bitcoin whitepaper, with the subtitle clearly stating “Peer-to-Peer Electronic Cash System,” imagining a trustless payment network without intermediaries. However, fifteen years later, Bitcoin has completely deviated from this path. High transaction fees (up to dozens of dollars during bull markets), slow confirmation times (an average of 10 minutes per block), and extreme price volatility make it impossible to serve as a daily payment method.

Today, Bitcoin is more like “digital gold,” serving as a hedge asset and speculative instrument in institutional portfolios. The launch of spot ETFs further cements this positioning, as Wall Street packages Bitcoin as a traditional financial product rather than a currency for buying coffee or remittances. The low transaction fees and quick confirmation system originally designed by Satoshi have been sacrificed in pursuit of decentralization and security.

Joël Valenzuela, Business Director of privacy coin Dash, pointed out that the market’s hope for peer-to-peer payments has shifted to stablecoins. Stablecoins, unaffected by price fluctuations, with fast transaction speeds and low fees, seem closer to Satoshi’s vision of electronic cash. Yet, the reality is developing in the opposite direction.

Stablecoin Regulatory Dilemma: From Decentralization to Quasi-Banking

As regulations in the U.S. and Europe tighten, stablecoins face an identity crisis. Regulations like the U.S. GENIUS Act and Europe’s MiCA Law bring legitimacy and security but also push stablecoin issuers into the traditional banking world. To meet requirements for reserves, audits, KYC (Know Your Customer), and redemption, the essence of stablecoins is changing.

Valenzuela worries that stablecoins may evolve into the next SWIFT, becoming an efficient yet opaque channel for institutions, merely providing faster pathways for existing players without true financial inclusion. Data shows over 60% of corporate stablecoin usage is for cross-border settlement rather than consumer payments. This trend indicates stablecoins are repeating the hierarchical structure of traditional finance, where large institutions enjoy convenience while ordinary users are excluded.

Regulatory KYC and audit requirements mean stablecoin issuers must know who is using their products, where the funds come from, and where they go. This is completely contrary to Satoshi’s original vision of anonymity and censorship resistance. Ironically, to gain regulatory approval, stablecoin issuers must partner deeply with traditional banks, storing reserves within banking systems—making stablecoins an adjunct to banking infrastructure rather than disruptors.

How Stricter Regulations Are Changing the Nature of Stablecoins

Reserve Transparency Requirements: Issuers must hold 1:1 fiat or equivalent assets, regularly audited by third parties

Identity Verification Mandatory: KYC/AML procedures make anonymous transactions impossible; large transfers must be reported

Redemption Mechanism Standardization: Users must redeem through compliant channels, unable to fully control funds like Bitcoin

Increased Cross-Border Restrictions: Conflicting regulations across jurisdictions hinder global circulation

Arthur Hayes: Stablecoins Are the Trojan Horse of Dollar Hegemony

Legendary trader Arthur Hayes offers a deeper critique in his article “Dust on Crust”: stablecoins have effectively become tools for traditional finance to absorb crypto capital. Take Tether (USDT) and Circle, which back their stablecoins with hundreds of billions of dollars in U.S. Treasuries, making these companies major buyers of U.S. government debt.

Hayes observes that in countries with severe inflation like Argentina and Turkey, people heavily use Tether (USDT) as a savings instrument. This phenomenon doesn’t weaken dollar hegemony—instead, it amplifies American influence over the global economy, creating a bottom-up dollarization. Satoshi envisioned escaping fiat systems, but stablecoins have become the conduit extending fiat into the crypto world.

Ironically, cryptocurrency adoption ends up reinforcing U.S. financial control. When users worldwide exchange local currencies for USDT or USDC, they are effectively purchasing dollar assets. These stablecoin issuers then invest those funds in U.S. Treasuries, financing the U.S. government. The system that crypto aimed to challenge ultimately becomes its strongest supporter.

Vulnerabilities of Decentralized Stablecoins Revealed

(Source: Trading View)

Amid the full dominance of fiat-backed stablecoins, some projects attempt to return to Satoshi’s original intent. MakerDAO’s over-collateralized stablecoin DAI, and Ethena Labs’ synthetic dollar USDe, aim to bypass banking restrictions by holding crypto assets rather than fiat. However, such models face significant challenges in high-frequency trading environments with low liquidity.

On October 11, the global crypto market experienced over $19 billion in liquidation events, notably with the USDe/USDT trading pair on Binance suffering severe depegging. Investigations point to internal pricing mechanisms and sudden liquidity evaporation. This incident highlights that in a world of automation and centralized risk management, so-called “stability” is more fragile than ever.

Decentralized stablecoins face a dilemma: accept regulation and become compliant products but lose decentralization, or insist on decentralization but struggle to compete with centralized platforms in liquidity and user experience. Currently, market sentiment appears to favor the former choice.

Satoshi’s Legacy and the Crossroads of Cryptocurrency

Valenzuela argues that the core issue is not regulation per se but design. If stablecoins cannot implement true peer-to-peer transfers and selective privacy, they will merely entrench the existing hierarchical system in a digital wrapper, becoming faster digital fiat. To honor regulatory compliance while keeping true to the original promise, developers and policymakers should embed compliance into protocol layers and maintain cross-jurisdictional composability.

Blockchain payment alliances are advocating for standardized cross-chain payments without sacrificing openness. The key question is whether we design inclusive and autonomous systems or lock existing systems into digital packaging. The future of money depends on the path we choose, and currently, the crypto world appears to be diverging from Satoshi’s original vision.