Stablecoins Could Reverse De-Dollarization Trend, According to Washington Think Tank

Stablecoins might function a boon for US greenback adoption, in accordance with the Atlantic Council, a nonpartisan assume tank.

Barbara C. Matthews and Hung Tran, senior fellows on the Council’s Geoeconomics Middle, be aware in a new analysis that the $227 billion stablecoin market is “tiny” in comparison with the $6.22 trillion US capital markets and the $3.39 trillion general crypto market capitalization.

“If present double-digit development charges for stablecoins proceed, they might represent a substantial proportion of general crypto market capitalization, if not capital markets themselves. Extra importantly, the overwhelming majority of stablecoins are pegged to the US greenback.

Speedy adoption charges paired with speedy transaction volumes and velocity in stablecoin markets imply that right this moment’s stablecoin and CBDC selections could amplify ongoing shifts in reserve foreign money markets. Dramatic shifts in reserve foreign money standing traditionally have been uncommon occasions. The extra seemingly state of affairs for threats to greenback dominance includes a variety of different currencies nibbling on the greenback’s position on the margins.”

The Atlantic Council analysts be aware that the greenback’s share of worldwide FX reserves has fallen from 71% in 2001 to 54.8% presently. They are saying stablecoins might probably play a task in reversing that pattern.

“On this context, decisions made by particular person customers can materially affect world reserve foreign money standing. The broad adoption of US dollar-backed stablecoins might even reverse the de-dollarization pattern. Selections made by policymakers throughout 2025 will thus materially affect how the stablecoin and greenback markets evolve.”

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