According to Cointelegraph, the United States is actively promoting dollar-pegged stablecoins as a strategic measure to counteract the diminishing status of the dollar as a global reserve currency. A recent report from digital asset banking group Sygnum highlights the current administration's efforts to expand the stablecoin market and urges Congress to enact relevant legislation. This initiative is part of a broader strategy to maintain the dollar's dominance in international finance.
U.S. President Donald Trump, alongside key figures such as Treasury Secretary Scott Bessent and David Sacks, the administration's 'Crypto and AI Czar,' is advocating for the swift passage of the GENIUS Act. This legislation aims to regulate stablecoins and their issuers within the United States. Having passed the Senate on June 17, the Act is now under consideration in the House of Representatives. Despite these efforts, there is growing international resistance to dollar-pegged stablecoins. Italy's finance minister recently expressed concerns about the risks posed by these stablecoins, suggesting they could be more significant than tariffs.
The demand for stablecoins not tied to the U.S. dollar is increasing, as noted by Dea Markova, Fireblocks policy chief. Although liquidity for these alternative stablecoins remains limited, Sygnum has partnered with Fireblocks to create an instant settlement network that includes stablecoin transactions. In Abu Dhabi, three major entities are collaborating to launch a dirham-pegged stablecoin, pending regulatory approval from UAE authorities.
The Sygnum report also highlights the demand for U.S. dollars from retail sectors in developing countries, which are grappling with inflation and depreciating local currencies. The U.S. administration believes that dollar-denominated stablecoins can address this demand and help restore the dollar's eroding status as a reserve currency. Katalin Tischhauser, head of research at Sygnum, emphasized the potential of dollar stablecoins to reinforce the dollar's monetary dominance, particularly if the blockchain-based, decentralized economy experiences significant growth. However, Tischhauser remains cautious about the impact of stablecoins on dollar dominance, noting that substantial retail adoption in developing countries would be necessary.
Resistance to the U.S. dollar's dominance may also arise from BRICS, a coalition of 10 countries aiming to reduce reliance on the dollar. Sygnum's report indicates that this group is advancing a multipolar financial system that favors using multiple fiat currencies for cross-border trade and settlement, rather than relying on a single global reserve currency.
