Why do stablecoins matter to US power? They don’t just reshape...
Daniel Baeza@dbaeza13
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May 02, 2025
~1 min read
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Why do stablecoins matter to US power?
They don’t just reshape crypto, they reinforce dollar’s global dominance.
As stablecoin usage increases, this new source of USD demand will support USD hegemony, acting as an offset against threats to the dollar on the back of tariffs
A🧵
They don’t just reshape crypto, they reinforce dollar’s global dominance.
As stablecoin usage increases, this new source of USD demand will support USD hegemony, acting as an offset against threats to the dollar on the back of tariffs
A🧵
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Stablecoins are digital claims to $, usable globally 24/7 which extends $ reach to places where $ banking is limited.
There are currently $230bn of stablecoins in existence; 60% is on Ethereum & 30% on Tron.
Largest stablecoinsare USDT and USDC, with market shares of 63% & 25%.
There are currently $230bn of stablecoins in existence; 60% is on Ethereum & 30% on Tron.
Largest stablecoinsare USDT and USDC, with market shares of 63% & 25%.
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Like eurodollar market in 20th century, stablecoins represent a private-sector expansion of the $ outside US borders, without relying on Fed/US banks
This boosts $ network effect: the more accessible USD becomes, the more it is used in trade, finance, & as global unit of account
This boosts $ network effect: the more accessible USD becomes, the more it is used in trade, finance, & as global unit of account
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Here's the kicker: most reserve-backed stablecoins invest user funds in Treasury bills, directly increasing demand for US Govt debt.
Stablecoin issuance would require extra purchases of $1.6tn of Tbills over the next 4 years, or $400bn a year.
Stablecoin issuance would require extra purchases of $1.6tn of Tbills over the next 4 years, or $400bn a year.
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Assuming Tbills’ share of total UST supply remains unchanged, this would be enough to absorb 100% of new Tbill issuance planned for rest of Trump’s 2nd term!
In terms of supply held, only MMFs (hold $2.4tn of the total $6.4tn of Tbills outstanding) would remain larger holders.
In terms of supply held, only MMFs (hold $2.4tn of the total $6.4tn of Tbills outstanding) would remain larger holders.
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Hundreds of billions in demand for US debt, just from stablecoins.
Stablecoins could be the equivalent of making a $ bank account accessible globally to anyone who satisfies KYC.
Much like what the Eurodollar market offers.
Are SC the new Eurodollars?
Stablecoins could be the equivalent of making a $ bank account accessible globally to anyone who satisfies KYC.
Much like what the Eurodollar market offers.
Are SC the new Eurodollars?
Daniel Baeza@dbaeza13
Are stablecoins (SC) the new Eurodollars (ED)? A 🧵
Comparing onchain trades (SC) to offshore activities (ED) shows that current onchain liquidity mechanism is primitive. Challenge with achieving par settlement in existing onchain SC is rooted in liquidity concerns, not solvency
Comparing onchain trades (SC) to offshore activities (ED) shows that current onchain liquidity mechanism is primitive. Challenge with achieving par settlement in existing onchain SC is rooted in liquidity concerns, not solvency
