Morgan Stanley Xing Ziqiang: The core purpose of the US "Genius Act" is to maintain the dominant position of the US dollar, and the long-term view is bearish on the US dollar.

Morgan Stanley's Chief Economist in China, Xing Ziqiang, pointed out: "The 'Talent Act' introduced by the United States essentially reflects its desire to maintain the dominance of the US dollar in the digitalization phase of the payment infrastructure." Xing believes that in the short term, the Stablecoin Act may further strengthen the international status of the US dollar, but this could also expose the global payment system's overreliance on the US dollar single-point risk. Xing analyzed that the Federal Reserve has started a rate-cutting cycle, with an expected cumulative rate cut of 125 basis points by the first half of next year, bringing rates to around 3%. At the same time, high US inflation due to labor shortages and rising import prices may lead to a rapid decline in real interest rates. Xing said, "We are bearish on the US dollar in the long term. When US real interest rates fall, the interest rate differential with other major economies will narrow, and may even fall below the rates of these economies. This could weaken global capital demand for the US dollar and US bonds, leading to a depreciation of the dollar and exacerbating volatility in the US bond market," Xing explained.