Manufacturing Demand

In 1988, Edward Herman and Noam Chomsky published Manufacturing Consent, describing how mass media produce ideological conformity not through overt censorship but through structural filters that shape what becomes thinkable. The consent was manufactured. The machinery was invisible because it operated through institutions experienced as neutral.

A parallel transition may be underway in how dollar hegemony reproduces itself.

For five decades, dollar demand was manufactured through commodity necessity. The petrodollar arrangement, negotiated secretly in 1974 between Treasury Secretary William Simon and Saudi oil minister Ahmed Zaki Yamani, established that oil would be priced in dollars and that surplus revenues would be recycled into US Treasuries. Enforcement required the visible apparatus of military power: carrier strike groups, forward bases, and bilateral security agreements. The arrangement generated resistance precisely because it was legible as coercion.

That architecture is fraying. The dollar’s share of global reserves has declined below 57 percent, a multi-decade low (IMF COFER, Q3 2025). Saudi Arabia announced BRICS+ membership and joined Project mBridge, enabling yuan-denominated settlement outside SWIFT.

What appears to be emerging to supplement it operates through a different logic entirely: not commodity necessity but behavioural cultivation. Not coercion but conditioning. The demand is manufactured, but it is experienced as choice.

Call it the algo-dollar: dollar hegemony reproduced through algorithmic platforms rather than petroleum agreements. The infrastructure is not one company. It is a class of instruments: dollar-denominated stablecoins whose reserves, by design, flow into US Treasuries. Tether (USDT) is the dominant example, with 60% of stablecoin supply and 80% of trading volume, and it is the focus of the evidence presented here. But the second-largest issuer, Circle (USDC), holds over US$33 billion in reserves with full regulatory compliance and produces the same structural outcome. PayPal has entered with PYUSD. Others will follow. The mechanism does not depend on any single issuer’s governance failures. It is architectural.

Tether Holdings, now headquartered in El Salvador, issues tokens pegged to the US dollar. The company’s structural position in global finance is worth stating plainly.

The Commodity Futures Trading Commission found that Tether was fully backed on only 27.6 percent of the days examined between 2016 and 2019 (CFTC Order, October 15, 2021). No major accounting firm has audited the company. The majority of its reserves are custodied by Cantor Fitzgerald, whose chairman, Howard Lutnick, now serves as US Commerce Secretary.

The significance lies not in the balance sheet but in the structural position. Cryptocurrency exchanges, prediction markets, and online gambling platforms have not adopted dollar stablecoins as a payment option; their architectures presuppose them. They are stablecoin-native: dependent on dollar-stablecoin settlement, as global oil markets became dollar-native under the petrodollar. Binance processes tens of billions of USDT daily. Polymarket settled US$2.7 billion in 2024 US election wagers through USDT. Coinbase, the largest US exchange, is a significant USDC distribution channel and a shareholder in Circle. These platforms function as distribution infrastructure for a form of dollar hegemony that requires no aircraft carriers. The rails are denominated in dollars regardless of which stablecoin issuer operates them.

The revenue model is elemental. Tether issues tokens. Users deposit dollars. Tether invests the deposits in US Treasuries. Tether earns the yield. Users earn nothing. The spread between what Tether earns on its reserves and what it pays its depositors (zero) produced US$13 billion in profit in 2024, making it likely the most profitable company per employee in the world. Every dollar deposited becomes, through the issuer’s reserve management, a purchase of American sovereign debt. The demand is not coerced. It is designed.

Dollar stablecoins exercise this privilege at scale. A firm headquartered in El Salvador now earns seigniorage on what functions as a shadow dollar, backed by US Treasuries it purchased with other people’s money, in a jurisdiction beyond the reach of the depositors whose funds generate the yield. This is not a payment innovation. It is a privatization of monetary sovereignty that routes, by construction, through American debt.

The effect on sovereign debt markets is no longer theoretical. A 2025 BIS working paper by Ahmed and Aldasoro finds that stablecoin inflows reduce three-month Treasury yields by 2 to 2.5 basis points within ten days, while outflows raise yields by 6 to 8 basis points, an asymmetry roughly two to three times larger for withdrawals. In 2024, stablecoins purchased US$40 billion in Treasury bills, comparable to major money market funds and exceeding most individual foreign government purchases. Total stablecoin Treasury bill holdings now surpass US$114 billion, exceeding those of many sovereign investors. The algo-dollar’s demand for American debt is measurable, significant, and growing.

The entry architecture reinforces the asymmetry. Any individual can deposit dollars into a stablecoin through any exchange, at any amount, with minimal friction. Direct redemption from Tether is a different matter.

Of 545 million estimated users, direct redemptions are concentrated among a small number of institutional arbitrageurs. Retail participants who wish to exit must sell on secondary markets, where liquidity depends on those same arbitrageurs. The architecture makes entry frictionless and exit gated. Deposits flow in easily; they do not flow out symmetrically.

The Federal Reserve and NBER researchers have noted the parallel to shadow banking: institutions that hold illiquid or duration-mismatched assets while promising fixed redemption at par, without FDIC insurance, without a lender of last resort, and without the regulatory infrastructure that was built after 2008 precisely to prevent this configuration from producing systemic risk. The concentrated arbitrage structure that maintains the peg also means that, in a stress scenario, the exit is narrower than the entrance. The more users the system acquires, the more fragile the exit becomes. This is not a design flaw. It is a structural property of the architecture.

In 2012, the anthropologist Natasha Dow Schüll published Addiction by Design, based on fifteen years of field research inside Las Vegas casinos. She documented how slot machines are engineered not to produce winners but to produce a state she called the "machine zone": a trancelike condition in which daily concerns, social demands, and bodily awareness recede, and the player’s sole objective becomes continuing to play. Not winning. Playing. The machines are designed to maximize "time on device." The addiction is not a side effect of the product. It is the product.

The core mechanism is variable-ratio reinforcement: rewards delivered unpredictably after varying numbers of inputs. B.F. Skinner identified this in the 1950s as the reinforcement schedule most resistant to extinction. The subject continues the behaviour long after the rewards become negligible, because the unpredictability itself generates the neurological response. Dopamine pathways shift from rewarding outcomes to rewarding anticipation. The brain learns to value the spin more than the result.

Electronic gambling machines show the strongest association with gambling disorder of any format: approximately 30 percent of regular players meet DSM-5 diagnostic criteria, compared to 6-8 percent for lottery players. The mechanism is not a theory. It is an engineering specification.

What Schüll identified on the casino floor was a spatial phenomenon: the machine zone existed in a room, and leaving the room meant leaving the zone. The transition to mobile platforms eliminates this boundary. The zone is no longer a place you enter. It is a condition that accompanies you. The same reinforcement schedules that kept a player seated at a slot machine in Las Vegas at 3 a.m. now operate on a phone during a commute, a lunch break, a child’s bedtime. The architecture of the casino has been dissolved into the architecture of daily life. Schüll’s research subjects could, at least in principle, walk away from the machine. When the machine is the phone, and the phone is always present, the zone becomes ambient: a persistent modulation of attention that the subject does not experience as entering or leaving, because there is no longer a threshold to cross.

In 1990, Gilles Deleuze published a three-page essay titled "Postscript on the Societies of Control". It anticipated, with remarkable precision, the logic of the infrastructure described here.

Deleuze argued that the disciplinary institutions Foucault had analyzed (the prison, the school, the factory, the hospital) were giving way to a new form of power. Disciplinary societies operated through enclosure: you knew you were being governed because the architecture of governance was visible. The factory wall, the prison cell, the hospital ward. Each space had its own rules. You entered, you complied, you left. Control societies, Deleuze wrote, operate through "ultrarapid forms of free-floating control" that function continuously across all domains of life. There are no walls. There is modulation: continuous, invisible adjustment of the environment to produce desired behaviour without the subject experiencing constraint.

The distinction maps onto the transition this analysis describes. The petrodollar was disciplinary. It required walls: military bases, bilateral treaties, the architecture of SWIFT. It was visible, and because it was visible, it was resistable. Nations could form BRICS. They could denominate trade in yuan. They could build mBridge. The algo-dollar operates through control. There is no coercion that registers as coercion. There is a platform that feels like entertainment, a wager that feels like agency, a stablecoin that feels like a neutral medium of exchange. The demand for dollars is generated not through necessity but through designed experience. The conditioning is not hidden in the sense of being secret. It is hidden in the sense of being indistinguishable from the experience of choosing freely.

A wallet address is a dividual. A behavioural profile assembled from wager history, transaction patterns, and platform engagement is a dividual. The platform does not discipline the user. It modulates the dividual, adjusting the feed, the odds, the prompts, the notifications, until the desired behaviour emerges as if spontaneously.

Recent scholarship has extended this framework to the digital age, arguing that control now operates through "personal information, big data, predictive analytics, and marketing," coercing "without prohibitions" by using "incentives that feel enjoyable and euphoric, compelling individuals to obey their own personal data." The system does not restrict. It modulates. The subject does not resist because the subject does not experience constraint.

It does not matter which company issues the stablecoin, or from which jurisdiction. The mechanism is the same. The more compliant the issuer, the more durable the infrastructure becomes.

There is a further extraction that Deleuze’s framework anticipates but does not name.

Stablecoin-native platforms perform both extractions simultaneously. They modulate behaviour to generate dollar demand (the algo-dollar function), and they harvest the transactional data of that behaviour as a secondary product (the surveillance function). Every wager timing, every on-ramp pattern, every wallet interaction is behavioral surplus. The user is both the demand source for dollar hegemony and the raw material for prediction markets. The two extractions operate on the same population, through the same infrastructure, in the same gesture.

Chomsky described the manufacturing of consent through media filters. Deleuze described the manufacturing of behaviour through environmental modulation. Zuboff described the extraction of behavioral surplus from the manufactured behaviour. Schüll documented the engineering of the machine zone through reinforcement schedules. The algo-dollar may represent their convergence: manufactured demand through designed experience, at the scale of global financial infrastructure, producing dollar hegemony as an emergent property of platforms that individually pursue nothing more than engagement and yield.

The infrastructure is being legitimized at ascending levels of institutional authority. The progression has a pattern.

The Bo Hines trajectory deserves particular attention. In January 2025, he led the White House working group that developed the federal framework for stablecoin regulation. By September 2025, he was running the American division of the company that framework would govern. The architect became a beneficiary of his own architecture. This is not alleged corruption. It is the observable sequence of a public official shaping regulation and then joining the regulated entity within months.

The Howard Lutnick trajectory runs parallel. Cantor Fitzgerald custodies Tether’s US$142 billion in Treasury reserves. The firm also holds convertible debt in Tether’s parent company, a 5% ownership stake in Tether, and is developing a Bitcoin-backed lending program in partnership with the company. Lutnick was a vocal public advocate, telling audiences that "Tether has every penny, and it can produce liquidity on a moment’s notice." He was then nominated and confirmed as US Commerce Secretary. During his Senate confirmation hearing, he softened these endorsements, clarified that Cantor was "not conducting continuous diligence on Tether’s financial statements," and declined to call for an independent audit. Senator Elizabeth Warren scrutinized the ties. Tether faces ongoing DOJ and Treasury Department probes for possible money laundering; the UN Office on Drugs and Crime has reported US$17 billion in USDT connected to underground exchanges and criminal activities.

The person who custodies the reserves became Commerce Secretary. The person who wrote the stablecoin law joined Tether. And the president who signed the law operates a stablecoin.

The pattern extends to the regulatory apparatus itself. In January 2026, CFTC Chairman Michael Selig, a former crypto industry lawyer at Willkie Farr & Gallagher who represented clients including Paradigm, launched the Innovation Advisory Committee. Its membership includes Chris Dixon (a16z crypto), Shayne Coplan (Polymarket), Tarek Mansour (Kalshi), Jason Robins (DraftKings), Christian Genetski (FanDuel), Brad Garlinghouse (Ripple), Vlad Tenev (Robinhood), Sergey Nazarov (Chainlink), Anatoly Yakovenko (Solana Labs), Brian Armstrong (Coinbase), Kris Marszalek (Crypto.com), and Alana Palmedo (Paradigm), alongside traditional exchange executives from CME, Nasdaq, ICE, Cboe, and LSEG. The committee advises the CFTC on regulation of the markets its members operate. Selig had already dropped the CFTC’s appeal against Kalshi’s election betting contracts and withdrawn proposed rules that would have prohibited political event contracts. Kalshi’s CEO and Polymarket’s CEO both sit on the committee advising how prediction markets should be regulated. The venture capital firm that invested in both platforms, a16z, also sits on the committee. The committee’s charter specifies that membership should include "a balance of viewpoints representing the financial industry, regulatory bodies, financial technology providers, public interest groups, academia, and market infrastructure firms." The membership includes no consumer advocacy organizations, no gambling addiction researchers, no public interest representatives, and two academic names among thirty-five executives. The CEOs of DraftKings and FanDuel sit on the advisory committee of a commodities regulator. The regulator, the regulated, and the investors in the regulated occupy the same advisory structure. The balance of viewpoints the charter requires is the balance of viewpoints the membership excludes.

The conventional reading of stablecoin adoption in Argentina, Turkey, and Nigeria is "financial inclusion": populations fleeing unstable currencies find refuge in dollar-pegged tokens, achieving informally what their governments cannot provide formally. This reading is not wrong. It is incomplete. It describes the behaviour without examining the conditions that produce it.

In 2019, Henry Farrell and Abraham Newman published "Weaponized Interdependence" in International Security, describing how the United States leverages its structural position at the center of global financial networks to coerce compliance. The mechanisms are the "panopticon effect" (surveillance through SWIFT and dollar clearing) and the "chokepoint effect" (denying network access to adversaries). The US has imposed over 70 active sanctions programs targeting over 9,000 entities worldwide, with financial measures now outnumbering traditional trade restrictions.

The consequences for targeted and adjacent economies are well-documented. IMF structural adjustment programs, which Robert Wade of the LSE describes as "choking the South", require currency liberalization, capital account opening, and fiscal austerity as conditions for credit access. The Tricontinental Institute documents that African countries have entered IMF arrangements repeatedly (Senegal over twenty times since 1979), exchanging fiscal autonomy for credit access in a cycle the IMF’s own 1996 evaluation acknowledged had failed to produce sustained development. The result is chronic currency instability: the naira depreciates, the lira collapses, the peso inflates. These are not natural disasters. They are the predictable outcomes of a monetary architecture in which developing countries must borrow in a currency they do not issue, service debts denominated in that currency, and accept conditionality that constrains their domestic policy options.

When these currencies destabilize, populations seek dollar stability. This used to mean physical cash or offshore bank accounts. Now it means dollar stablecoins. The direction of flight is always the same: toward the dollar.

Argentina makes the political program explicit. President Milei is not merely tolerating informal dollarization. He is actively pursuing it: "Every Argentine will be able to buy, sell and invoice in dollars, or in the currency he considers, except for the payment of taxes." Stablecoins already represent 61.8% of Argentine retail crypto transactions, 17 percentage points above the global average. This is not a survival mechanism discovered by individuals. It is a political program that deepens dollar dependency through the infrastructure of stablecoins. Argentina received US$91.1 billion in crypto inflows between July 2023 and June 2024, overtaking Brazil to lead Latin America.

Turkey demonstrates the pattern under geopolitical pressure. Turkish stablecoin purchases equal 4.3% of GDP, the highest of any country globally. USDT-TRY is the largest trading pair on Binance. A country navigating the tensions between NATO membership and BRICS engagement has its population building dollar dependency through the behavioural substrate, one transaction at a time.

An IMF working paper (2024/133) characterizes this dynamic as a "marketplace for capital flight," with persistent crypto price premiums indicating the intensity of demand for foreign currency and the severity of capital controls. The framing is revealing. "Capital flight" implies agency on the part of the fleeing capital. The conditions that make flight rational (currency instability, inflation, restricted access to dollar banking) are treated as given. The question of who created those conditions, and whose interests their continuation serves, is not asked.

The feedback loop is: sanctions and conditionality destabilize currencies. Currency instability drives populations to dollar stablecoins. Stablecoin reserves purchase US Treasuries. Treasury purchases reinforce dollar hegemony. Dollar hegemony underwrites the capacity to impose further sanctions and conditionality. The demand is manufactured, but the manufacturing occurs upstream of the individual’s decision to open a stablecoin wallet. By the time the Argentine worker or the Turkish shopkeeper converts their local currency, the architecture that made that decision rational has already been constructed. Regardless of which stablecoin they choose, the dollar demand is generated and the Treasury is purchased.

This is not a "third reading" separate from the algo-dollar thesis. It is the same thesis operating through policy rather than platform design. In the West, demand is manufactured through behavioural conditioning (variable-ratio reinforcement, platform architecture, the normalization of speculation). In the Global South, demand is manufactured through monetary conditioning (currency destabilization, sanctions, conditionality, restricted access to formal dollar banking). The mechanism differs. The direction of flow is identical: toward dollar stablecoins, toward Treasuries, toward dollar hegemony reproduced without aircraft carriers.

Jurisdictions have responded differently, and the divergence reveals the difficulty of governing infrastructure that operates across borders and across the boundary between financial regulation and behavioural conditioning.

The common limitation: every jurisdiction regulates instruments (tokens, exchanges, issuance). None has developed a framework for governing the behavioural infrastructure that generates demand for those instruments. The variable-ratio reinforcement, the algorithmic personalization, the influencer ecosystems, the platform architectures designed to maximize time-on-device: these operate upstream of the financial regulation and are not addressed by it.

What is described here is emergent order: a macro-level pattern that arises from the interaction of components, each pursuing its own logic, without any single actor designing the whole. Tether pursues yield on reserves. Platforms pursue engagement through reinforcement schedules. Sanctions regimes pursue geopolitical compliance. Legislators pursue campaign finance and post-government careers. Startup accelerators pursue returns. Each actor operates rationally within its own frame. The emergent property of their interaction is an architecture that produces dollar demand through conditioning, at a scale and durability that no single actor could have designed or would have had the authority to impose.

The question is not whether to permit stablecoins. Prohibiting them in the Global South would restrict the only accessible store of value without addressing the monetary conditions that make it necessary. And the question is not whether one issuer is better governed than another. Circle’s regulatory compliance does not change the structural function of its product; it makes the infrastructure more durable. The question is whether existing frameworks, in any jurisdiction, adequately address a class of instruments that manufactures demand for one nation’s currency through behavioural and monetary conditioning rather than commodity necessity. Infrastructure that operates on nervous systems in the West and on monetary systems in the Global South. That generates compliance experienced as choice in both cases, through different mechanisms, toward the same destination.

Dollar stablecoins represent the next stage of this process. They are privately issued tokens that function as money, backed by a claim on government debt, governed by terms of service rather than democratic mandate, and stripped of the residual public accountability that state-issued currency, however imperfectly, still carries. They commodify the fictitious commodity. And the infrastructure described in this analysis does not merely commodify it. It engineers demand for it through the behavioural and monetary conditioning of hundreds of millions of people, producing, as an emergent property, the continuation of one nation’s monetary hegemony through mechanisms that no single actor designed and no existing regulatory framework governs.

The petrodollar required visible coercion and thus invited resistance. The algo-dollar, if that is what this is, requires only that the speculation environment be shaped, the appetite cultivated, and the loss normalized.