The Global War Over Money

One side controls the rules. The other controls the users. You're caught in the middle.

A parallel financial system now processes more volume than Visa and Mastercard combined. It moves dollars instantly across borders for a fraction of what banks charge. It holds more US Treasuries than Saudi Arabia.

Traditional finance is fighting to stop it. Your retirement savings are already on the battlefield.

If you have a retirement account with Vanguard, you own Strategy. You own Bitcoin exposure. You didn’t choose it. The index chose it for you.

Vanguard, the $10 trillion asset manager that won’t let customers buy Bitcoin ETFs because crypto “doesn’t align with its vision,” is now the largest institutional holder of a company whose entire business model is buying Bitcoin.

They own over 8% of Strategy. Worth roughly $9 billion.

It happened automatically. The Total Stock Market Index Fund and other passive vehicles mirror broad market indices. This isn’t an active bet. It’s a passive obligation. Index funds don’t pick stocks. They copy whatever the benchmark defines as eligible. Once Strategy qualified, every fund tracking those benchmarks had to buy it.

Index inclusion isn’t a recommendation. It’s plumbing.

When MSCI or Nasdaq labels something eligible, billions flow automatically, regardless of what any portfolio manager thinks.

Two companies sit at the center of what’s being built. Both have grown so large that ignoring them is no longer an option. A pattern of coordinated behavior across regulators is determining whether they can exist inside the traditional financial system or will be systematically excluded from it.

(Strategy = MicroStrategy, ticker MSTR. The company rebranded in February 2025. Its legacy software business is now irrelevant next to its Bitcoin treasury.)

What You’re Actually Buying

Most people think they’re making simple bets. Bitcoin goes up, you make money. Hold USDT, it’s just a digital dollar. Own MSTR in your index fund, it’s just another tech stock.

Not quite.

Strategy (MSTR) looks like a stock. It’s actually a Bitcoin-backed structured finance company, the first of its kind. The company holds over 649,000 Bitcoin, more than 3% of all Bitcoin that will ever exist.

But Strategy doesn’t just hold Bitcoin passively. It actively creates, structures, and issues financial products: five digital credit securities (STRK, STRF, STRD, STRC, STRE) representing over $7.7 billion in notional value. These instruments generate yield, raise capital, and allow the company to keep buying Bitcoin without ever selling.

When you buy MSTR, you’re not buying a software company. You’re funding an experiment in whether Bitcoin can serve as productive capital for a publicly traded enterprise.

Tether (USDT) looks like a digital dollar. It’s actually a zero-interest loan you give to a company so they can earn yield on your money.

Each USDT you hold is backed largely by US Treasury bills. Tether earns the yield (currently around 4%) and you earn nothing. In exchange, you get a dollar that moves instantly, 24/7, anywhere in the world.

Wall Street calls it a stablecoin. It’s one of the largest shadow banks on Earth. For millions of people in failing economies, it’s the most reliable dollar they can access.

The Scale

Tether now holds over $135 billion in US Treasuries. If it were a country, it would rank 17th in the world for Treasury holdings, ahead of Saudi Arabia, South Korea, and Germany.

Tether’s profit through Q3 2025: over $10 billion. More profitable than Goldman Sachs. More profitable than Morgan Stanley. All earned on money that users deposited and left sitting there, expecting nothing in return.

Strategy’s Bitcoin stack: $59 billion at current prices. The company has raised nearly $20 billion in 2025 alone through equity and preferred stock offerings to keep buying. Annual dividend obligations on its preferred shares are approaching $700 million and rising.

These numbers have gotten too large to wave away. They’ve also gotten large enough to threaten incumbents.

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Who Actually Uses USDT

The dismissal: stablecoins are for crypto traders.

That was true in 2019. It’s not true anymore.

In Nigeria, where the naira lost 70% of its value against the dollar, Tether has become the de facto savings vehicle. In Venezuela, where hyperinflation made the bolívar worthless, people hold USDT. In the Philippines, overseas workers send remittances home via stablecoins because Western Union charges 7-10% and takes three days.

Stablecoin transfers can reduce remittance costs by up to 80%.

A $500 transfer via Western Union might cost $30-50 in fees. The same transfer via stablecoin costs under $1 and arrives in minutes. Bitso, a Latin American exchange, processed $3.3 billion in US-Mexico remittances last year at under 1% fees.

Stablecoin transaction volume hit $8.9 trillion in the first half of 2025. That’s more than Visa and Mastercard combined. More than 433 million people have used stablecoins at least once.

For people in unstable currency regimes, USDT isn’t a crypto speculation. It’s the most accessible dollar they can get.

Cutting off that access isn’t consumer protection. It’s economic exclusion.

The Attack

Traditional finance hasn’t just noticed. It has mobilized.

The attack has three phases: first debank, then deny infrastructure, then tilt the rules toward bank-issued alternatives.

Phase One: Debanking

Marc Andreessen revealed on Joe Rogan’s podcast that he knew of 30 tech founders who had been debanked. Accounts closed without explanation, without recourse.

This wasn’t paranoia.

In December 2024, Coinbase obtained internal FDIC communications through a Freedom of Information Act lawsuit. The documents revealed 23 separate instances where FDIC regional offices in New York, Chicago, Kansas City, Dallas, and San Francisco instructed banks to “pause all crypto asset-related activity” or “not proceed” with planned services.

The pattern extended to individuals. Jesse Powell, Kraken’s founder, had his personal bank accounts closed. Brad Garlinghouse, Ripple’s CEO, was given five days to move his money. Brian Armstrong, Coinbase’s CEO, was told by regulators that stablecoins would be banned entirely.

Coinbase’s Chief Legal Officer Paul Grewal:

“There was a concerted plan on the part of the FDIC that they carried out, without any reluctance, to deny banking services to a legal American industry.”

Phase Two: Infrastructure Denial

Caitlin Long’s Custodia Bank is the clearest case of what happens when you try to build inside the system.

Custodia is a Wyoming-chartered bank designed to serve crypto companies while maintaining 100% reserves. No lending, no leverage, no fractional reserve risk. Safer, by design, than traditional banks.

Long applied for a Federal Reserve master account in October 2020, which would give Custodia direct access to Fed payment systems. Without it, the bank can’t clear checks, transfer securities, or settle payments directly. It has to pay another bank to do those things on its behalf.

For nearly three years, the application sat in limbo.

Then, on January 27, 2023, the Fed denied it. The same day the White House released its “Roadmap to Mitigate Cryptocurrencies’ Risks.” The Fed’s statement cited “safety and soundness risks” from Custodia’s “proposed focus on crypto-assets.”

A federal judge upheld the denial in March 2024. Custodia is appealing with bipartisan heavyweight support. Former solicitors general from both the Obama and Bush administrations have filed briefs on its behalf.

Translation: even if you build a crypto bank that’s safer than traditional banks, you won’t get access to central bank infrastructure.

Phase Three: Regulatory Tilt

While one arm of government cuts off access, another creates structural advantages for bank competitors.

The GENIUS Act, America’s new stablecoin law passed mid-2025, explicitly prohibits non-bank stablecoin issuers from paying interest. Banks can.

JPMorgan launched JPMD, a deposit token pitched as “a superior alternative to stablecoins for institutional use.” Unlike Tether, JPMD can pay yield. Unlike Tether, it’s backed by deposits with potential FDIC coverage.

The playbook: wall off crypto-native stablecoins, then launch competing products with regulatory blessing.

January 15, 2026

MSCI’s call on Strategy isn’t just an index reshuffle. It’s a referendum on whether Bitcoin-backed companies can exist inside mainstream finance.

The Stakes: $8.8 Billion in Forced Selling

MSCI is considering whether companies whose digital-asset holdings exceed 50% of total assets should be classified as investment funds rather than operating companies.

If Strategy gets reclassified, it becomes ineligible for MSCI’s flagship equity indices. The consultation closes December 31, 2025. The decision comes January 15, 2026. Any changes take effect in February.

That triggers forced selling by every fund tracking those benchmarks. JPMorgan estimates outflows of $2.8 billion from MSCI alone, and up to $8.8 billion if other index providers follow. MSCI’s preliminary review list includes 38 other crypto companies, including Marathon Digital and Riot Platforms.

TD Cowen, the 107-year-old investment bank, expects all MSCI indices to remove Strategy. They called the decision “misguided” and “unfortunate,” but inevitable.

The Defense: “We’re Not a Fund”

Strategy isn’t waiting.

CEO Phong Le has been on a media blitz this month, reframing the company’s preferred shares as competitors to bank savings accounts. “A Bitcoin-backed preferred paying around 10.25% monthly and tax deferred” versus money market yields of 4%.

He’s explicit about the target: the $30 trillion savings market. “Could we reach $30 billion? I think we could.”

He’s also predicting that “a large bank will offer Bitcoin custody by the end of 2026,” framing Strategy as building infrastructure for an inevitable future rather than fighting against it.

Michael Saylor pushed back directly on X:

“Strategy is not a fund, not a trust, and not a holding company. We’re a publicly traded operating company with a $500 million software business and a unique treasury strategy that uses bitcoin as productive capital.”

His argument: “Funds and trusts passively hold assets. Holding companies sit on investments. We create, structure, issue, and operate. No passive vehicle or holding company could do what we’re doing.”

If you exclude us, you’re not classifying a company. You’re censoring a financial model.

The Market’s Verdict: Skeptical

The market isn’t convinced the defense will work.

MSTR is down roughly 40% from its November 2024 highs, diverging sharply from Bitcoin itself. The stock trades around $177 as of late November.

JPMorgan’s read: the underperformance “likely reflects concerns about index inclusion” more than crypto prices. The continuous equity offerings have also diluted common shareholders significantly, a factor that contributed to institutional selling in Q3 2025, even as Bitcoin itself held firm.

The mNAV (the ratio of Strategy’s market cap to its Bitcoin holdings) has collapsed from 3.2x in late 2024 to roughly 1.1x today.

If mNAV falls below 1x, the market is saying “this stock is worth less than the Bitcoin it owns.” At that point, issuing new shares to buy more Bitcoin becomes value-destroying rather than accretive. The flywheel that powered Strategy’s accumulation breaks.

With annual dividend obligations approaching $700 million and the software business still cash-flow negative, Strategy needs the capital markets open to keep the model running.

What This Means

If you own a target-date fund, a total market index, or a Nasdaq-100 tracker, you already have exposure to this fight. You already own Strategy. You have indirect Bitcoin exposure whether you wanted it or not.

The question isn’t whether you’re invested. The question is which side wins.

The bull case for the parallel system: Traditional finance is too slow, too expensive, too exclusionary. Billions lack bank accounts. Cross-border payments take days and cost too much. Stablecoins and Bitcoin-treasury companies fill gaps banks won’t. A Filipino worker who saves 80% on remittance fees isn’t going back to Western Union. As adoption grows, dislodging them gets harder.

The bear case: Regulators will finish what they started. Banks will launch competing products with better trust guarantees. Index providers will push crypto-heavy companies into separate categories. The parallel system will stay parallel, tolerated offshore, excluded from mainstream American finance.

What’s actually happening: Both, simultaneously. Tether is getting adopted by hundreds of millions in emerging markets while facing exclusion from U.S. indices. Strategy is in the Nasdaq-100 while fighting for survival in MSCI. JPMorgan is debanking crypto founders while launching its own deposit token.

The traditional system has the power to exclude. The parallel system has the users. January 15 will tell us which force is stronger.

What to Watch

January 15, 2026: MSCI decision. Billions in flows hinge on it.

Strategy’s mNAV: Currently ~1.1x. Below 1x, the equity flywheel breaks.

GENIUS Act rollout: Bank-issued tokens get structural advantages. Watch whether Tether’s market share erodes.

Stablecoin volume: $8.9 trillion in H1 2025. If that keeps growing despite pressure, the parallel system is winning regardless of what happens in index committees.

The convexity trap: The US government now holds $135 billion in Treasury exposure through stablecoin reserves. When stablecoins contract, yields spike 2-3x harder than they fall during expansion. Shanaka Perera breaks down how America accidentally wired its sovereign debt to crypto volatility: The Convexity Trap

This analysis is educational and is not investment advice.

Pierce & Pierce Research: institutional-grade crypto analysis for retail investors.