BitMEX founder Arthur Hayes's latest prediction has once again shocked the market: the stablecoin market size will reach $34 trillion, becoming the ultimate tool for the U.S. to maintain dollar hegemony. This is not science fiction; it is a financial revolution that is happening.
Hayes's logic chain is clear and convincing. First, the U.S. government is facing an unprecedented debt crisis, with national debt exceeding $35 trillion and annual interest payments nearing $1 trillion. The traditional solution is for the Federal Reserve to print money to buy government bonds, but this would lead to uncontrolled inflation. Stablecoins provide a perfect solution: allowing global users to voluntarily purchase digital dollars backed by U.S. government bonds, which resolves the debt issue without triggering inflation.
The second step is the participation of tech giants. Hayes predicts that companies like Meta and Google will launch their own stablecoin wallets, embedded in applications like WhatsApp and Gmail. Imagine when 3 billion WhatsApp users can use dollar stablecoins with one click; how much room for survival will local currencies have? This 'digital dollar colonization' will be more effective and subtle than military conquest.
The numbers speak for themselves. The current stablecoin market size is about $200 billion, with an annual growth rate exceeding 50%. If this pace continues, reaching $5 trillion in five years is not a fantasy. Hayes believes that when central banks realize this threat and begin to fight back, the U.S. will ensure through regulatory means that only compliant stablecoins backed by U.S. government bonds can survive. Ultimately, the global $34 trillion offshore dollars and savings will be absorbed into this system.
The impact on DeFi will be revolutionary. When tens of trillions of dollars flood into the crypto market, even if only 1% flows into DeFi protocols, it means a TVL in the hundreds of billions. Protocols like Ethena, Aave, and Compound will be the biggest beneficiaries of this feast. Hayes is particularly optimistic about Ethena's synthetic dollar USDe, believing it offers a source of yield that does not rely on the traditional banking system and is the best tool to combat 'stablecoin hegemony.'
The frightening aspect of this prophecy is that it is gradually becoming reality. Circle is already applying for a banking license, PayPal has launched PYUSD, and even JPMorgan is testing JPM Coin. How long can the traditional monetary system hold out when Wall Street and Silicon Valley join forces to push this transformation? Hayes's $34 trillion prophecy may not be crazy, but rather conservative.
