A week and a half ago I was attending the second of a three-part series covering BTC. These sessions were quite interesting because they would bring together people, from CleanSpark, Riot Platforms, Marathon Digital, and others. It was during this second session that I first heard of an idea that has made a lot of sense to me.
The US should encourage USD-pegged stablecoins.
Over the last couple of years, it has become much more common to hear people talk about the US debt issue and the US running out of parties who were interested in its debt. This then has fed into the idea that the US dollar could lose its World Reserve status and while I do not see that becoming an issue or something that would happen in my lifetime (the US dollar is backed by the most sophisticated and impressive military in the world... that what you do get with an enormous military budget like the US has) others are not so sure.
So why would the US want to encourage USD-backed stablecoin adoption and development? The US would stand to benefit immensely since stablecoin issuers now hold over $120 billion in US Treasury Notes making them the 18th largest holder and this number hasn't slowed down. Not only that but as Sam Lyman of Riot Platforms told us it would be a huge tool in ensuring further dollarization across the world helping further cement the USD as the World's Reserve Currency. The size of USDT and USDC Treasury holdings are larger than that of Germany and South Korea.
If Congress or Regulators clear the way for stablecoins preventing the SEC and CFTC from going after them then they could really take off and grow. Assuming they keep the basic rule that they have to have a dollar for every dollar they issue then the Treasury Notes will continue to be a fantastic source for them. Thus increasing the demand that these issues will have and creating a thriving market for US debt. The result is a win/win for everyone involved with the US government possibly securing hyperdollarization something which would immensely benefit the US and the USD.
This is why I love going to these briefings that are held on The Hill because I never would have put all of these factors together. I could have seen the great appetite that would have been had for debt but I never would have thought about how this debt could further the dollar, even in a digital way, solidifying if not expanding the US's grasp on the world economy.
Please know I am not a financial advisor and make sure you do your own research! If you enjoyed this article and would like to support me further below are a few referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_
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