Stablecoins Strengthen U.S. Dollar Dominance, Challenge Bitcoin’s Global Supremacy, Says Citi
Citi Wealth strategists argue that stablecoins are reinforcing the U.S. dollar’s global dominance, while challenging the idea that Bitcoin could someday replace the dollar as the leading global currency.
The report highlights how stablecoins, which represent the majority of cryptocurrency trading volumes, are pegged to the U.S. dollar. These coins are backed by U.S. dollars and Treasuries, further solidifying their connection to the U.S. currency. Citi suggests that if the U.S. government provides more regulatory clarity, the demand for stablecoins—and thus, the U.S. dollar—could increase.
Stablecoins, rather than undermining the dollar, might make it more accessible to international markets, thereby reinforcing the U.S. currency’s role in global finance. The report predicts that, with clearer regulations, the demand for U.S. Treasury bills from stablecoin issuers could grow significantly.
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Currently, Tether’s USDT and Circle’s USDC dominate the stablecoin market. Additionally, Ripple’s RLUSD stablecoin recently gained approval from the New York State Department of Financial Services, signaling further expansion.
Citi also points to a massive increase in stablecoin activity, with $5.5 trillion in transactions during the first quarter of 2024, surpassing Visa’s $3.9 trillion. As traditional financial services adapt, companies like Visa and PayPal are integrating stablecoins into their systems, further blurring the lines between traditional and digital finance.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
