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I used to think that the dominance of the US dollar in world trade would fade as technologies like crytocurrencies rise, but the dominance of stablecoins pegged
by dlcarrier 1y ago
I used to think that the dominance of the US dollar in world trade would fade as technologies like crytocurrencies rise, but the dominance of stablecoins pegged to the US dollar has shown that without, or even despite, policies and practices of the US government, society is adamant that USD be the reserve currency.
- A_D_E_P_T 1y agoIt's still early days. If the dollar suffers from any serious shocks, or inflation accelerates, stablecoins will peg themselves to something else, or to a basket of currencies or commodities. I don't see anything that stops them from jumping ship the minute the going gets tough, and it would presumably be irrational not to.
- alphazard 1y agoThe timing of a migration away from dollars will depend mostly on US fiscal and monetary policy. Better financial infrastructure on-chain isn't going to do it alone. The stablecoins will absolutely accelerate the transition, so that when it does happen, it happens more quickly. Anyone with a stablecoin can transact on-chain for something else. And anyone holding stablecoins will be using an app that has familiarized them with the idea of alternate currencies and currency exchanges. This is probably a good thing. A realistic not terrible scenario is a few year period where you have to pay attention to exchange rates, but your net-worth is mostly unaffected and at the end of it you're paying for groceries with something that's not USD.
- s_ting765 1y agoStablecoins !== USD. Also USD's circulation in US markets has nothing to do with maintaining reserve currency status.