Dedollarization is gaining momentum, reminiscent of the scale of Nixon's 'shock' in 1971, when the United States abandoned the gold standard, according to Frisby. China, the largest creditor of the United States, has been consistently reducing investments in American treasury bonds for ten years and sharply increasing its gold reserves. Gold has already outpaced the euro and has become the second most popular asset in central bank portfolios, surpassing U.S. treasury bonds in share of global reserves.
'There is currently no other fiat currency capable of taking on the role of a global reserve currency. Against this backdrop, Bitcoin as the leading cryptocurrency complements gold in the digital world, where, alongside gold, it is positioned as an alternative to the dollar,' emphasized MoneyWeek's analyst.
U.S. authorities have legalized dollar-backed stablecoins as a private substitute for the digital dollar, noted Dominic Frisby. According to the provisions of the GENIUS law, the issuance of stablecoins is possible with mandatory reserves of 1:1 based on U.S. dollars, short-term Treasury bonds, or similar liquid assets such as Bitcoin. Major stablecoin issuers hold up to 18% of their reserves in risky assets, including Bitcoin and other crypto assets. Moreover, the increase in demand for stablecoins correlates with the growth of issuers' reserves in gold and the first cryptocurrency, Frisby stated.
The issuer of the largest stablecoin by market capitalization, USDT, the company Tether, which has become one of the significant holders of U.S. Treasury bonds, announced the accumulation of 80 tons of gold and an increase in its Bitcoin reserves to 10,424 BTC. As of September 12, Tether has issued over 174 billion tokens and expects to maintain an average monthly issuance rate of USDT stablecoins at 2.9%, including through the issuance of the asset in the Ethereum and Solana ecosystems.
Analysts at the Federal Reserve Bank of Kansas City expect that by 2035, the stablecoin market, whose liquidity will be backed by Bitcoin reserves, could double from $250 billion to $500 billion.
In other words, Frisby summarizes, the growth of the stablecoin market will help the U.S. finance its debt and maintain the dominance of the American currency, which, in turn, will stimulate the growth of issuers' reserves in gold and Bitcoins.
Earlier, the author of the personal finance book 'Rich Dad Poor Dad,' Robert Kiyosaki, stated that gold, silver, and Bitcoin will help investors preserve capital during the impending economic collapse.
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