Stablecoins, a type of cryptocurrency pegged to fiat currencies like the U.S. dollar, could help stave off a potential U.S. debt crisis by becoming a reliable source of new demand for U.S. government debt[1]. According to the Treasury Department and DeFi Llama, dollar-backed stablecoins are already an important net purchaser of Treasurys, sitting just outside the top 10 countries holding U.S. government debt[1]. If the stablecoin sector continues to grow, it could become one of the largest buyers of U.S. debt[1].

Sources [1] Crypto Could Stave Off a U.S. Debt Crisis https://www.aei.org/center-on-opportunity-and-social-mobility/crypto-could-stave-off-a-u-s-debt-crisis/ [2] Crypto Convulsions, Digital Delusions, and the Inexorable Logic of ... https://monthlyreview.org/2022/12/01/crypto-convulsions-digital-delusions-and-the-inexorable-logic-of-finance-capitalism/ [3] The Economic and National Security Impact of Offshoring ... https://www.aei.org/events/the-economic-and-national-security-impact-of-off-shoring-cryptocurrency/ [4] Inside latest crypto firm paying billions to end legal troubles - CNBC https://www.cnbc.com/2024/06/16/inside-latest-crypto-firm-paying-billions-to-end-legal-troubles-.html [5] Remarks by Deputy Secretary of the Treasury Wally Adeyemo at the ... https://home.treasury.gov/news/press-releases/jy1934

Very interesting story

Written by Paul Ryan, boring 🥱

This has to be comical. Tether alone has minted at least a quadrillion USDT in its lifetime.

Yes, this is very similar to the path Eurodollars took to legitimacy. Both (originally eurodollars now stablecoins) were originally eschewed, then firmly embraced once they saw that it helped cement hegemony of the dollar.

As a corollary to this, Bitcoin will start appearing on asset on Central Bank balance sheets. It is structurally good to have an asset that appreciates forever and positively responds to inflation. The key good is that it is not another debt-instrument, but a pure asset.

So lemme get this straight... They are hoping that the demand for 2nd-tier USD will grow so much that it will increase demand for their 1st-tier USD?

The same USD that just went out of fashion when the petrodollar ended?

They are only grasping at straws here... So desperate it reeks.