Stablecoins could serve as a boon for US dollar adoption, according to the Atlantic Council, a nonpartisan think tank.
Barbara C. Matthews and Hung Tran, senior fellows at the Council’s Geoeconomics Center, note in a new analysis that the $227 billion stablecoin market is “tiny” compared to the $6.22 trillion US capital markets and the $3.39 trillion overall crypto market capitalization.
“If current double-digit growth rates for stablecoins continue, they could constitute a considerable proportion of overall crypto market capitalization, if not capital markets themselves. More importantly, the vast majority of stablecoins are pegged to the US dollar.
Rapid adoption rates paired with speedy transaction volumes and velocity in stablecoin markets mean that today’s stablecoin and CBDC decisions may amplify ongoing shifts in reserve currency markets. Dramatic shifts in reserve currency status historically have been rare events. The more likely scenario for threats to dollar dominance involves a range of alternative currencies nibbling at the dollar’s role at the margins.”
The Atlantic Council analysts note that the dollar’s share of global FX reserves has fallen from 71% in 2001 to 54.8% currently. They say stablecoins could potentially play a role in reversing that trend.
“In this context, choices made by individual users can materially impact global reserve currency status. The broad adoption of US dollar-backed stablecoins could even reverse the de-dollarization trend. Decisions made by policymakers during 2025 will thus materially impact how the stablecoin and dollar markets evolve.”
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