Stablecoins and the Dollar's Dilemma

Paper 30draftIntroductory
Jon Smirl — March 2026
Abstract. Dollar stablecoins create massive new demand for US Treasuries, intensifying the Triffin contradiction and triggering a dollarization spiral in developing countries — but the transition to a mesh-dominated financial system is non-monotone, with market depth first improving and then deteriorating as autonomous agents displace human traders.