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Federal Reserve Board Governor Christopher Waller stated that stablecoins, as the lifeline of the DeFi ecosystem, heavily rely on the US dollar. With the continued rise of the DeFi trend, this actually helps further solidify the dominance of the US dollar.
Although most political figures view cryptocurrencies as a major threat to monetary systems and financial stability, Federal Reserve Board Governor Christopher Waller recently offered a contrasting viewpoint. He mentioned that stablecoins, being vital to the DeFi ecosystem, heavily depend on the US dollar. As the DeFi trend continues to gain momentum, this actually contributes to reinforcing the dominant position of the US dollar.
Speaking at a public seminar on Thursday, Christopher Waller remarked, "There is often speculation that cryptocurrencies like Bitcoin may one day replace the US dollar as the global reserve currency."
Christopher Waller then highlighted a crucial fact, stating that the majority of DeFi transactions involve the use of stablecoins, with 99% of stablecoins globally pegged to the US dollar. This implies that cryptocurrencies are essentially transacted in US dollars.
Therefore, regardless of how thriving and prosperous transactions within the DeFi sector become, the ultimate outcome may only serve to strengthen the dominance of the US dollar.
Christopher Waller, appointed as a Federal Reserve Board Governor by former US President Donald Trump in 2020, admitted that widespread adoption of digital currencies instead of the US dollar in the future could indeed pose a threat to monetary policy. However, he believes that at least in the short term, the US dollar will not lose its status as a reserve currency, nor will its dominance in trade and financial activities significantly diminish. In fact, it may even be reinforced.
Christopher Waller emphasized that claims of the US dollar's potential decline in international trade dominance are unfounded:
While some countries are using digital currencies and the Chinese yuan more in international trade than before, the US dollar remains the primary trading currency, with no clear alternatives emerging.
The latest data shows that the total market capitalization of stablecoins currently stands at $139.4 billion, with USDT leading with a market capitalization of $97.3 billion, accounting for 71.63% of the market share. USDC follows in second place with a market capitalization of $28.1 billion and a market share of 20.71%.
Financial analysts anticipate that the stablecoin market will expand rapidly in the coming years, with market capitalization reaching $3 trillion within five years. |
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Post time 1-4-2024 22:15:49