According to Bryan Pellegrino, the CEO and founder of LayerZero Labs, stablecoins represent the best instrument for the United States government to uphold the supremacy of the US dollar within international financial markets.
In a discussion with a leading cryptocurrency media outlet, Pellegrino highlighted that the cross-border availability of dollar-backed tokens makes them an ideal contender for bolstering demand for the US dollar. He expressed:
“Stablecoins tied to the US dollar are the ultimate tool — a Trojan Horse or vampire attack on all other currencies globally, be it Argentina, Venezuela, or any nations facing rampant inflation.”
Pellegrino anticipates that both federal and state support for stablecoins will increase, thanks to the clear advantages they bring to the US dollar in foreign exchange markets, thereby establishing a financial barrier around its status as the global reserve currency.
Overview of the stablecoin market.
Related: Recent guidance from the SEC clarifies that some stablecoins are not considered securities.
US Government Seeks Stablecoins to Safeguard the Dollar
Pellegrino pointed to Tether’s growing role as one of the largest purchasers of US Treasury bills globally as a clear sign of the demand for US debt from stablecoin issuers.
Recently, Tether ranked as the seventh-largest holder of US Treasuries, surpassing nations such as Canada, Germany, Norway, Hong Kong, and Saudi Arabia.
During the White House Crypto Summit on March 7, the US Treasury Secretary indicated that the administration plans to utilize stablecoins to reinforce the US dollar’s dominance, labeling it as a top priority for government officials in 2025.
A 2023 analysis revealed that over 50% of the digital asset value transferred to Latin American countries, including Argentina, Brazil, Colombia, Mexico, and Venezuela, was performed in stablecoins.
The low transaction fees, relative stability, and near-instant settlement offered by dollar-pegged stablecoins render them highly effective for remittances and as stores of value for individuals in developing nations coping with significant inflation and capital controls.
Magazine: Centralized stablecoins are undermining Bitcoin payments.