Stablecoins, Over 98% Dollar-Based...Good for the US?

▲ Stablecoin, Dollar (USD)/AI Generated Image

With dollar-based stablecoins accounting for over 98% of the global stablecoin supply, a warning has emerged that the growth of the cryptocurrency market could further strengthen the US dollar's hegemony while also increasing the long-term burden of monetary policy.

Fortune reported on May 5 that stablecoins are being integrated into the global financial system as cryptocurrencies pegged to real-world assets, and companies like Visa and Stripe are expanding their related distribution networks. Fortune stated that while Euro-based stablecoins and gold-based stablecoins also exist, over 98% of the total market supply is pegged to the US dollar.

The dollar-centric nature of the stablecoin market is considered a favorable trend for the US in the short term. This is because as global users hold digital dollar-form stablecoins and utilize them for payments, remittances, and cryptocurrency transactions, the demand for the US dollar expands. Fortune reported that experts believe this structure could have significant consequences for the global economy in the future.

However, concerns have also been raised that as the demand for dollar-based stablecoins grows, the US government might be tempted to print more money. Fortune reported that a billionaire in the virtual asset industry stated that the increasing global demand for US dollar-based stablecoins could boost the government's incentive to issue currency.

The core of this discussion is that stablecoins are no longer merely auxiliary tools used only within cryptocurrency exchanges. As global payment companies enter stablecoin distribution, dollar-based digital assets are emerging as a new infrastructure for cross-border payments and fund movements. The fact that over 98% of the market is tied to the dollar demonstrates a structure where the growth of the stablecoin industry is directly linked to the expansion of dollar influence.

Fortune pointed out that while the overwhelming share of dollar-based stablecoins could benefit the US, this trend does not permanently guarantee only positive outcomes. The proliferation of stablecoins strengthens dollar demand while simultaneously becoming a variable that increases the burden and responsibility of US monetary policy within the global financial system.

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