Source: Fortune
Summary
Experts say that stablecoins, a type of cryptocurrency pegged to a real-world asset, are becoming part of the global financial system, with over 98% of the market supply pegged to the US dollar. This could have major consequences for the future of the global economy. Stablecoins are loosening governments’ control over their populations’ money supply, and their adoption will be driven by their ease of use on the internet. This could further cement the dollar’s status as the world’s reserve currency, but also raise concerns about the US government’s fiscal discipline.
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The numbers tell one story.
Visa and Stripe are distributing stablecoins, but experts like Haseeb Qureshi and Barry Silbert are warning about the implications. Silbert predicts that stablecoins will make it harder for the US government to rein in its fiscal profligacy, and that this could have negative consequences. Meanwhile, China is promoting its own digital yuan, but it’s unlikely to rival dollar-backed stablecoins.
The strategy enters a familiar phase: easy money and loose monetary policy.
Stablecoins are not just a new financial instrument, but a way to bypass capital controls and blur the distinction between public and private markets.
The announcement sounds familiar: the US dollar as the world’s reserve currency, but with a new twist.
One thing is clear: the rise of stablecoins will have far-reaching consequences for the global economy.
The big question is: what happens when the music stops, and the US government can’t print its way out of trouble?
