Fed Governor: Stablecoins Bolster the Dominance of the US Dollar

Approximately 99% of the total market capitalization of stablecoins is pegged to the US dollar, reinforcing its status as a reserve currency. This was stated by Christopher Waller, a member of the Board of Governors of the Federal Reserve.

“People often assume that cryptocurrencies like Bitcoin could replace the US dollar as the world’s reserve currency. However, most transactions in the DeFi sector use stablecoins pegged to the dollar. About 99% of the market capitalization of stablecoins is dollar-pegged—this means that crypto assets are effectively traded in dollars,” he explained.

According to Waller, the rapid development of the digital asset industry will not diminish the dominant role of the American currency but will instead enhance its influence.

“I believe that the US dollar will not lose its status as the world’s reserve currency anytime soon. I do not even expect a significant decline in its dominance in trade and finance,” added the Fed Governor.

Back in the autumn of 2022, Waller criticized the idea of launching a digital dollar. He believes that a CBDC would not strengthen the position of the American currency on the international stage.

In October 2023, Fed Board member Michelle Bowman questioned the feasibility of launching a digital dollar. According to her, expanding access to financial services and reducing friction within the payment system may not be exclusive to CBDCs.