Over 98% of stablecoins are dollar backed. That’s good for the U.S.—until it’s not

Stablecoins, a form of cryptocurrency pegged to a real world asset, are becoming part of the global financial system, with firms like Visa and Stripe rushing to distribute them. They are also overwhelmingly dollar based. While there are euro stablecoins and gold stablecoins, more than 98% of the total market supply is pegged to the greenback, and that will have major consequences for the future of the global economy say experts. Speaking at the Milken Institute conference in Beverly Hills on Tuesday, Haseeb Qureshi of the venture capital firm Dragonfly noted that stablecoins are loosening the iron grip that governments have always wielded over their populations’ money supply. “Stablecoins are intrinsically subversive. Most people in the world live under capital controls and don’t have the freedom to own whatever financial assets they want,” he said. For practical purposes, this means more of the world’s population is poised to use U.S. dollars for transactions and for their personal savings. This adoption will be driven by how easy it is to move dollar-denominated stablecoins around the internet. Barry Silbert, the billionaire founder of the crypto consortium Digital Currency Group, noted that this trend will be a boon for the United States since it will further cement the dollar’s current status as the world’s reserve currency. If the global population becomes increasingly dependent on the dollar, that will in turn serve the country’s geopolitical interests. In response, Silbert predicted, some governments will to seek to promote a tightly controlled version of stablecoins known as CBDCs, or central bank digital currencies. China is already doing so with its digital yuan. But given that these currencies lack global fungibility and are highly surveilled, it is highly unlikely they will emerge as serious rivals to dollar-backed stablecoins. All of this, said Silbert, is part of a broader transformation of financial mark