The Role of Stablecoins in Preserving the Dollar’s Reserve Status
The United States sees dollar-pegged stablecoins as crucial for maintaining the dollar’s global reserve currency status, according to a Sygnum report. The administration supports stablecoin market growth and seeks regulatory legislation to solidify their role.
The GENIUS Act: A Regulatory Framework
The GENIUS Act, championed by former President Donald Trump and his administration, would establish clear rules for stablecoins and issuers. After Senate approval, the bill now moves to the House of Representatives for consideration.
Global Pushback and Emerging Alternatives
While the U.S. promotes dollar-linked stablecoins, international skepticism grows. Italy’s finance minister warned about potential risks, and Abu Dhabi entities plan a dirham-pegged stablecoin pending regulatory approval.
Addressing Demand in Developing Economies
The Sygnum report notes strong demand for dollar access in developing nations facing inflation. Dollar-based stablecoins could meet this need while supporting dollar dominance, though BRICS nations work to reduce dollar reliance through alternative financial systems.
