The rise of stablecoins isn’t just a fintech story. It’s also about an upgrade to national security.
Cash is untraceable. That makes it ideal not only for everyday transactions, but also for criminal enterprises, terrorist financing and rogue state activity. By contrast, stablecoins — that transact on blockchains — deliver dramatically better traceability. In many cases, stablecoin transactions can be frozen or even clawed back. For law enforcement, that’s a real game changer.
The old advice to “follow the money” becomes much more feasible when stablecoins make financial flows traceable in real time, without the smoke screens of offshore accounts or anonymous shell companies.
That’s one reason we’re now seeing real political momentum for stablecoins in Washington. In its July report, the President’s Crypto Working group acknowledged “unlike traditional assets, the technology underlying digital assets enables ways to mitigate the risk of illicit transactions.”
The GENIUS Act passed with bipartisan support, giving stablecoin development a clear legal path. Major banks are onboard, too, with JPMorgan, Citi, Bank of America, Goldman Sachs and Morgan Stanley all referencing stablecoin initiatives in their second-quarter earnings calls. This isn’t just theoretical anymore; tokenization is coming. The digital dollar is being built — and is projected to bring $3.7 trillion on-chain by 2030.
But programmable money needs programmable defense. That’s where our current approach is lacking. We cannot afford to protect America’s financial future with outdated tools. We must modernize our approach to deterrence and recovery.
When crypto infrastructure is exploited by hostile actors — say, a North Korean-linked hacking group moving funds through decentralized protocols — law enforcement must respond. But the tools available today are slow. Investigators trace assets, coordinate across jurisdictions, and pursue legal seizure that requires due process. But while this is happening, the assets can be instantly fragmented, mixed, or moved halfway around the world.
Traditional enforcement is simply too sluggish for today’s digital battlefield. The question is what we can do instead.
The surprising answer may lie in the U.S. Constitution, which was drafted almost 240 years ago in 1787. Article I, Section 8 grants Congress the authority to issue what were known as “letters of marque and reprisal” in order to supplement the country’s naval forces. These were used during the Revolutionary War and again in the War of 1812 to authorize the activities of privateers — civilian ships empowered to seize enemy property. They operated under legal oversight, staked bonds with the U.S. government in order to operate, and brought captured goods to prize courts for adjudication. The government kept a portion of the proceeds, with the rest awarded to the privateer.
It was an elegant solution: legal, effective and budget-neutral.
This historical practice can readily be adapted for today’s cyber threats. Instead of tall ships, we would license bonded cyber defense teams to track, freeze and recover digital assets tied to sanctioned actors or hostile regimes. These modern-day privateers would operate under clearly defined mandates, subject to oversight and recourse. And prize courts — revived in modern form — could oversee disputes and distribute recovered assets between governments and authorized teams.
Note that this is not a proposal for vigilantes or bounty hunters. It is a legal framework for proactive, permissioned action against adversaries who are exploiting the openness of decentralized systems.
Importantly, it requires no taxpayer funding. That makes it politically viable and strategically smart. It also allows the United States to deter malicious actors at digital speed, rather than waiting for slow-moving legal mechanisms to catch up.
One application would be helping to fund a U.S. Strategic Bitcoin Reserve, which is gaining traction in policy circles as a way to future-proof America’s monetary posture. But like many forward-looking initiatives, a strategic bitcoin reserve lacks a clear financing mechanism.
Recovered crypto assets could provide that pathway. Just as historical privateers helped fund early American naval power, modern cyber-privateers could help secure a digital reserve. In doing so, they would enhance both financial resilience and national defense, a rare example of a defense proposal that also strengthens economic security.
I’ve discussed this proposal with lawmakers on both sides of the aisle, as well as senior figures in the executive branch. The reaction has been consistently encouraging. The idea resonates with them because it blends historical precedent with modern urgency, appealing to constitutional traditionalists, cyber hawks, and even populists. It’s the kind of idea that could unite an unusually wide coalition.
What could appeal more to today’s political mood than reviving a Founding Fathers-era policy that helped win American independence — and adapting it to protect our emerging digital frontier?
Stablecoins offer an upgrade to how money works. But they also require an upgrade to how we defend it. We need financial infrastructure that is fast, legal and built for the terrain we’re operating in.
The Constitution gave us the model. We just need to modernize the mission.
Chris Perkins is president of CoinFund.
