Season 7, Post 43: Learning from Genghis

Your author was privileged to attend an economics conference in London last week featuring a range of high-profile speakers. Beyond the usual conversations about macro and asset allocation strategies, there was some fascinating debate about stablecoins. We learned from two different presenters why and how stablecoins will become a foundational building block for the 21st century economy.

For those unfamiliar, a stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to a reserve asset, such as a fiat currency like the US dollar or a commodity like gold. Stablecoins operate as tokens issued on existing blockchains (decentralised digital ledgers), which enforce transactions and ownership algorithmically.

In the view of Pippa Malmgren, an American economist and technology entrepreneur whom we also featured in post 25, stablecoins will be one of the crucial tools used by the Trump administration in order to expand its global presence. Ms Malmgren asserted that just as Genghis Khan had succeeded in creating the largest empire in history via a combination of blitzkrieg technology and the enforced acceptance of Mongolian currency, so a similar approach is being attempted today.

While the Mongols invented metal stirrups that allowed their riders to fight more effectively and so conquer large swathes of the planet, so team Trump has effectively partnered with Silicon Valley with a similar end in mind. Put another way, the combination of AI with stablecoins will help drive global dominance. 'Trust the code' has become the new normal in both Silicon Valley and Washington DC. The next part of the equation (apparently advocated by Scott Bessent, the US Treasury Secretary) is to use decentralised finance to refinance the US sovereign balance sheet and reduce the country’s debt burden.

It's a compelling world view, even if the line of argument is complex and requires a certain amount of techno-optimism. Nonetheless, stablecoins could act as “a way to grow Dollar hegemony.” This was the view of Anthony DeMartino, the CEO and co-founder of Sentora, a provider of DeFi and risk management solutions, who also spoke at the conference. Admittedly, he has a vested interest. However, he highlighted the importance of the GENIUS Act (which we profiled in post 27) as a mechanism for legitimising stablecoins.

We are sympathetic to the view that stablecoins have little to do with “crypto bros” (a term used by Mr DeMartino) and how the real war lies between the commercial banking ecosystem and the consumer economy. It’s hard to know what Genghis Khan may have thought of this, but consider how in a world of stablecoins, the current ~3% fee charged by credit card companies on payments disappears. Bigger picture, tokenisation promises instant settlement, potentially unleashing of significant capital. For more on this very real possible revolution, look out for our first theme piece of 2026, which will profile this topic in depth.

11 November 2025

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.

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Alex Gunz, Fund Manager