The trillion dollar opportunity you are not aware of yet… – Creed Capital Crypto News

We wrote about Stablecoins for two weeks now. Circle, a stablecoin issuer debuted on NYSE at a price of 31$ per share and then shot up in three days to 120$ a share. This week the Genius Act or the stablecoin regulation act was passed in the US Senate and the price of circle has gone up to 200$ a share it has become a 50 billion dollar market cap company.

The Genius Act makes it possible for companies and banks in the US to issue stablecoins. There will be rules for stablecoins not issued in the US. Analysts, such as those at Citigroup, project the global stablecoin market could reach as high as $3.7 trillion by 2030, driven by the increasing integration of digital assets into traditional finance and favorable economic conditions. Standard Chartered Bank even estimates the market could reach $2 trillion within the next three years. This is like Eurodollars end of the day and it is a humungous market.

Most retail investors focus their attention on the stock market—tracking the S&P 500, investing in tech names, or trying to time the next meme stock rally. But while equities dominate the headlines, they’re just one slice of a much larger financial pie.

First, let us have a look at the size and scale of various markets where you can invest your money.

The US stock market capitalization is 32 trillion dollars and average daily trading volume is 300 billion dollars. The Indian stock market is 5 trillion dollars market cap. The US bond market is valued at 55 trillion dollars and 910 billion dollars are traded daily. The Forex market trades 7 trillion dollars’ worth daily globally. The housing market is a 50-100 trillion dollar market and mortgage back securities trade average 350 billion dollars daily. The US swaps market is massive.

Specifically, interest rate derivatives (IRD) are the largest class, estimated at $258 trillion outstanding as of 2024. Within IRDs, interest rate swaps (IRS) account for the majority, with a notional outstanding of $469 trillion swaps market in 2024. The interest rate markets like the treasury futures, swaps and Eurodollar futures is where the big boys play and place massive bets. For the large amounts of money they handle and bet, they cannot place such large bets in the equities market without considerably moving the price.

Retail investors generally understand earnings reports, celebrate stock splits, and track analyst upgrades. Stocks are generally valued using a discounted cash flow model.

Let’s assume an investor can invest his money risk free for 4% in government bonds, which pay him 4% interest every year. For such an investor to move his investment into stocks which are riskier than government treasuries, he needs to get a return larger than government interest rates. Returns on a stock are called dividend. Stocks or Equities are ownership of companies. A company has revenues and expenses or cost of goods sold. Revenues less cost of goods sold is called gross profit. You reduce taxes, wages, amortization, interest from gross margins and then we get net profit. The net profit is then divided among owners and this is what is a dividend. If the company does not grow and price does not change, this dividend divided by the stock price of one share is the yield or returns of holding that stock and that better be more than government bond yields or the investment does not make sense from a cash flow perspective.

If interest rates rise, it means the company pays more on their debt and less money is available for dividends which means stock prices can fall. If there is high inflation the government and central banks will have to increase interest rates and stock prices can fall. So, a knowledge of interest rates and yield curves are crucial to making bets even in the stock market. If interest rates go up people will pay more in interest on credit cards to housing and therefore there will be less amounts to invest in stocks and again due to less demand stocks can fall. When interest rates are very low, there is a chase by money into all asset classes to obtain some form of yield. And prices of all assets rise at that time.

Investors need to understand these yields, inverted yield, the 10 year yield to 2 year yield spread, Treasury futures and Eurodollar futures. Treasury futures represent the most liquid centralized market for U.S. Treasuries, trading on average $774 billion in notional per day in 2024 on the Chicago Mercantile Exchange. Treasury bonds are issued by the US government. It is controlled to an extent by US and the Fed within the US and every other country today is affected by this because most debt or payment is settled in US dollars. But there is an interest on EuroDollars which is dictated by the market outside of the US.

Interest rates influence nearly every financial decision—whether consumers buy homes, whether businesses hire or expand, and how governments manage debt. For investors, they’re the lever that adjusts how much future earnings are worth today.

Who controls interest rates? In the U.S., the Federal Reserve (the Fed) sets a benchmark known as the federal funds rate, which is the rate at which banks lend reserves to each other overnight. While this sounds technical and obscure, it forms the foundation for rates on everything from savings accounts to corporate bonds.

Rates fluctuate in response to inflation, economic growth, and financial instability. When inflation is high, the Fed raises rates to cool spending. When growth falters or a crisis looms, it cuts rates to encourage borrowing and investment. This “tightening” or “loosening” of monetary policy has a direct and immediate effect on stock valuations—especially growth stocks whose earnings lie far in the future. But there’s more to the story.

The Fed only sets one interest rate. The market determines all the others—mortgage rates, Treasury yields, corporate borrowing costs. And increasingly, those markets are influenced not just by domestic events but by global flows of capital, much of which originates in the mysterious world of Eurodollars.

Despite the name, Eurodollars have nothing to do with the euro currency. They are U.S. dollars held outside of the United States, typically in foreign banks or offshore branches of U.S. institutions. These are not regulated by the Federal Reserve and do not count as part of the U.S. money supply.

The origins trace back to the Cold War. In the 1950s and ‘60s, the Soviet Union and other countries, wary of keeping dollar reserves within the reach of U.S. authorities, began depositing dollars in European banks. These offshore dollars became a source of credit creation, giving rise to what we now call the Eurodollar market. But it didn’t stop there. Over time, the Eurodollar system evolved into a sprawling network of wholesale money markets, where banks, institutions, and governments borrow and lend in U.S. dollars outside the reach of U.S. regulators. Today, this market is estimated to be in the tens of trillions of dollars—larger than the entire U.S. commercial banking system. Why does this matter? Because it means that most of the dollar credit creation in the world doesn’t happen under the Fed’s control. It happens offshore, in a parallel system that is just as real, just as powerful—and far less transparent.

Think of the global dollar system as a dual monarchy. On one throne sits the Fed, controlling base money, setting policy rates, managing the domestic banking system. On the other sits the Eurodollar market—a decentralized, privately-run network of institutions minting credit in dollars with little oversight. When the Fed prints money, it does so through reserves and Treasury purchases.

But in the Eurodollar system, banks can create synthetic dollars through interbank lending, swaps, and repo contracts. There is no central authority, no reserve requirements—just a series of promises backed by collateral, confidence, and liquidity. This leads to strange phenomena. For example, the Fed can flood the U.S. with liquidity while global markets remain tight. Or, conversely, the Fed can tighten, but Eurodollar liquidity remains ample—propping up risk assets. Retail investors often assume the Fed is omnipotent. But if the global demand for dollars exceeds the Fed’s domestic supply, offshore lending rates can rise even as the Fed cuts rates. This disconnect can wreak havoc on emerging markets, disrupt funding for global corporations, and trigger crises that look unrelated on the surface—but stem from Eurodollar dysfunction.

One of the most important—yet least understood—markets in the world is the Eurodollar futures market. Traded on the Chicago Mercantile Exchange (CME), this market reflects expectations of short-term U.S. interest rates up to 10 years into the future. These contracts are used by banks and corporations to hedge interest rate exposure and liquidity risk. But more than that, Eurodollar futures often lead Fed policy. In many cases, shifts in Eurodollar curves precede official rate hikes or cuts. They represent what the market believes—not just what the Fed says. The Eurodollar system is also deeply embedded in the repo market, where institutions borrow cash overnight by pledging securities as collateral. When confidence drops or collateral is scarce, funding freezes—leading to events like the 2007 credit crunch or the 2019 repo spike. In these moments, the plumbing matters. And the pipes that carry the most water are offshore, dollar-denominated, and largely invisible to the average investor.

Emerging market countries often borrow in U.S. dollars—even if their revenues are in local currency. When the Eurodollar system tightens or Fed hikes cause the dollar to appreciate, these debts become harder to service. This leads to financial crises in countries like Argentina, Turkey, or Sri Lanka. But the contagion doesn’t stop there. Global investors, fearing instability, sell risk assets across the board. Tech stocks, which rely heavily on borrowing and investor optimism, take a hit. During the 2022 selloff, for example, the rise in real yields crushed the valuations of high-growth names. Behind the scenes, Eurodollar rate shifts were already signaling tightening conditions months earlier. What looks like a “tech bubble bursting” may often just be a global liquidity squeeze. When money becomes expensive—even offshore—the most speculative assets are the first to fall. If you’re a retail investor, here’s the takeaway: you ignore interest rates and Eurodollars at your own peril.

Whether you’re buying Tesla, trading options, or holding dividend stocks, your returns are affected by how much money is in the system, how easy it is to borrow, and how confident institutions are in rolling over debt.

Want to understand what’s coming?

Watch the yield curve: when it inverts, recessions often follow.

Track Eurodollar futures: they hint at where short-term rates are headed.

Observe the dollar index: a rising dollar can signal tightening global liquidity.

Pay attention to repo rates and collateral stress: early signs of market freezes.

You don’t need to be a macro expert. But you do need to recognize that the macro sets the stage. Your favorite stock lives and dies by forces much larger than earnings per share. The stock market may get the headlines, but liquidity drives returns. And the world’s liquidity engine—especially in U.S. dollars—doesn’t sit in Washington. It sits offshore, in trading desks and vaults from London to Singapore.

This is the Eurodollar system, and it shapes the flow of money more profoundly than most realize. Retail investors have more access to information than ever. But access without awareness is dangerous. Understanding how interest rates, debt, and offshore dollars interact gives you an edge—not just in investing, but in surviving the next storm. Because in the end, it’s not the retail trader who moves markets. It’s the plumbing. And the Eurodollar is the ghost in the machine.

Last week we talked about Stablecoins. Stablecoins and Eruodollars have a similarity. Both Eurodollars and USDT are meant to represent U.S. dollars. But they don’t exist within the official U.S. banking system. They are offshore dollar substitutes, used for global transactions. Neither Eurodollars nor Tether are issued or directly backed by the U.S. government. The Fed doesn’t oversee how many Eurodollars exist or how much USDT is issued. This makes both systems part of what is often called the “shadow dollar system.” Both systems allow people and institutions outside the U.S. to access and use U.S. dollars, even if they don’t have a U.S. bank account. This boosts the availability of dollars around the world and makes them even more dominant in global trade and finance.

Eurodollars are essentially bank IOUs—promises by a foreign bank to pay U.S. dollars when needed. USDT is a digital token backed by a company’s promise that there’s a dollar (or something close to it) behind every coin. In both cases, there is no direct link to a physical dollar in a U.S. vault. It’s all based on trust and the issuer’s credibility.

Most people don’t realize that not all “dollars” are created equal. If you’re using Venmo, trading stocks, or checking your savings account, you’re using U.S. dollars inside the regulated system. But when banks lend to each other in London using Eurodollars, or when a crypto trader in Singapore buys Bitcoin with USDT, they’re using synthetic dollars—dollar lookalikes that behave like real money, but aren’t created or guaranteed by the Fed. These systems affect interest rates, liquidity, and risk across the world. And since modern markets are globally connected, what happens in these “off-grid” dollar systems can affect:

• Stock prices
• Crypto volatility
• Emerging market debt
• The value of the dollar
• Liquidity in U.S. and global banks

We live in a financial world where trillions of synthetic dollars are created, traded, and destroyed daily—outside the oversight of the U.S. government. Eurodollars and USDT are two of the most important examples. They make the U.S. dollar even more dominant in global finance—but they also add risk, especially when trust breaks down. Neither is “fake,” but neither is fully under the control of any central authority either. They live in the grey zone between usefulness and danger.

For investors, policymakers, and even everyday savers, it’s important to understand that the modern dollar is no longer just a paper bill issued by the Fed. It’s a complex network of promises and digital tokens—and knowing how it works might help you avoid the next financial surprise.

And as a stablecoin investor if you buy a usd stablecoin it will only be worth maximum one dollar. But if you are from Zimbabwe where your local money devalues every day or 100% every year even a usd stablecoin investment might be a great investment.

If you are an investor into a stablecoin company, be it a rupee stablecoin or a usd stablecoin maybe you can capture part of this trillion dollar opportunity provided you have the vision, the execution strategy and the ability to make the public use your stablecoin. If that happens as a company you can collect all these deposits, invest in short term treasury for 5% and keep collecting that money free on someone else’s deposits. Not a bad business eh?

Nithin Eapen is a technologist and entrepreneur with a deep passion for finance, cryptocurrencies, prediction markets and technology. You can write to him at neapen@gmail.com

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