How the Stablecoin Milkshake Will Redollarize the World
•January 5, 2026
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Why It Matters
Understanding the limits of de‑dollarization and the inevitability of a credit‑driven crisis helps investors allocate capital wisely and anticipate policy shifts that could reshape global financial markets.
Key Takeaways
- •Global desire to reduce reliance on US dollar reserve status.
- •Dollar Milkshake theory predicted rising dollar, US assets outperformance.
- •Central banks can delay but not avoid inevitable debt‑driven crisis.
- •Systemic debt growth requires continuous expansion or risk credit contraction.
- •AI‑driven productivity boost could postpone but not solve crisis.
Summary
The interview revisits Brent Johnson’s Dollar Milkshake theory, examining whether the world is moving toward de‑dollarization or a renewed dollar dominance (“redollarization”). Johnson explains that while many nations voice a desire to shed the US dollar’s “exorbitant privilege,” the structural realities of a debt‑based monetary system keep the dollar entrenched as the global reserve currency.
Key insights include the theory’s original forecast: rising interest rates would lift the dollar, boost US equities and gold, and outpace other asset classes. Although the anticipated sovereign debt crisis has not yet materialized, Johnson argues that central banks have merely postponed it by “kicking the can down the road.” The design of money‑creation—loans that must grow faster than interest—means a credit contraction is mathematically inevitable unless the economy expands continuously.
Johnson highlights several striking statements: “the primary role of any central bank is the perpetuation of the state,” and “it is a mathematical certainty that we will have a crisis.” He also notes the dollar’s recent “wrecking‑ball” performance, its 2025 dip, and the persistent narrative of de‑dollarization driven by tariffs, sanctions, and geopolitical fraying.
For investors and policymakers, the implication is clear: the dollar’s dominance is unlikely to vanish soon, and any systemic crisis will reshape capital flows. Diversification into assets that can hedge against a potential credit crunch—such as gold, stablecoins, or growth‑oriented sectors like AI—remains prudent, while over‑reliance on the notion of an imminent de‑dollarization may be misplaced.
Original Description
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Brent Johnson returns to Bankless to update the Dollar Milkshake Theory and explain why the de-dollarization narrative misses the bigger trend. He argues markets may want out of the dollar, but the Eurodollar system keeps pulling demand back in, and “dollar down” headlines do not break the framework. Brent also covers how debt stress can spill into political instability, why stablecoins and the GENIUS Act could accelerate re-dollarization, and what this means for monetary sovereignty. We close with China’s counter-strategy and how Brent thinks about positioning from here.
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TIMESTAMPS
0:00 Intro
1:20 De-Dollarizing vs Re-Dollarizing: Milkshake Recap
4:18 What a Sovereign Debt Crisis Actually Means
5:45 Central Banks as “Professional Can-Kickers”
8:56 Can They Slowly Let the Air Out?
11:03 Can AI Productivity Save the System?
13:06 2025 Setup: The Narrative for Dedollarization
18:06 BRICS: Conference Talk vs Structural Reality
23:37 Store of Value vs Medium of Exchange
34:24 “Crisis = Dollar Up” (and the April Exception)
39:06 Stablecoin Redollarization and the GENIUS Act
47:20 Monetary Sovereignty, Faster Bank Runs, Faster Dollarization
52:34 China’s Response: Two Currency Stacks
54:21 Positioning as an Investor
RESOURCES
Brent Johnson
The Dollar Milkshake Theory
Not financial or tax advice. See our investment disclosures here:
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