The Federal Reserve stated that stablecoins will strengthen the dominant role of the US dollar as 99% of the total capitalization of stablecoins is tied to it. Does this mean that the status of the reserve currency is being strengthened by the emergence of new stablecoins and the development of existing tokens on the markets?
It is possible that the popularity of stablecoins actually contributes to the dominance of the USD. More precisely, it strengthens its status as the world’s reserve currency.
That said, it should be noted that the USD, even without reliance on stablecoins and the cryptocurrency market, has logically been considered as such, since it has accounted for a large proportion of global settlements and storage mechanisms.
The market capitalization of stablecoins is pegged to the dollar – this is how the system is set up. However, there is no reason to assume that higher demand for stablecoins will qualitatively play into the hands of the dollar and put pressure on other currencies.
