As global reliance on digital currency increases, experts like the Circle CEO warn that the US dollar’s status as the foremost global reserve currency may be under threat. The rise of stablecoins, digital currencies pegged to a stable asset such as the US dollar or gold, has upped the stakes in the financial sector.
Take, for instance, what happened on July 13. Jeremy Allaire, the CEO of Circle, the company behind USDC, openly warned lawmakers about the risks of not regulating stablecoins. This call to action came along with the reintroduction of a bipartisan, digital asset-specific legislation that had first been tabled over a year ago in 2022. He proposed that the dollar’s position was critically in danger, especially with other nations racing to establish their own digital currencies.
At the heart of the issue is how money gets used on the internet. The more transactions take place digitally, the more digital currencies worldwide vie for dominance. Allaire clearly frames the picture by asking whether the dollars or foreign digital currencies like the euro or yuan will rule global e-commerce. The CEO, in previous discussions, has also hinted at China potentially taking advantage of stablecoins to increase the usage and spread of the yuan.
There appear to be whispers of consensus within the block. Mike Novogratz, founder of the crypto investment firm Galaxy Digital, believes that a stablecoin, with its higher potential for interests, is an obvious choice over a bank that strongly resembles a hedge fund. He voiced hopes that the US lawmakers would facilitate the growth of regulated stablecoins instead of thwarting them.
The reasoning behind demanding stablecoin regulation is simple. Allaire emphasizes that cryptocurrency is on the brink of revolutionizing how we pay. The traditional financial system’s inefficiency is evident in their high fees and delayed payments, an undue burden that takes a toll on the global economy to the tune of nearly a trillion dollars. The prediction is that as crypto finds greater acceptance, billions will start using it in the not-so-distant future. Therefore, if America wish to continue leading the world economy and desire the dollar to remain the world’s reserve currency, the need of the hour, Allaire insists, is to build faith in digital dollars and regulate stablecoins today.
Source: Cointelegraph
