Citibank: Dollar stablecoins help reinforce the dominance of the dollar rather than replace it

ChainCatcher news, Citibank's latest report believes that stablecoins not only have the potential to reinforce the dominance of the US dollar but also challenge the notion that Bitcoin will one day end the dollar's hegemony.

Analysts in the report stated: "Initially, cryptocurrencies like Bitcoin were seen as competitors to central bank-issued currencies. In fact, some believed—and still believe—that Bitcoin could end the dollar's hegemony. However, USDT is challenging this notion."

Citibank pointed out that the vast majority of stablecoins are pegged to the US dollar, with issuers holding both dollars and US Treasury bonds. Analysts also indicated that if the US government further legitimizes stablecoins, this could enhance the dollar's dominance. "Increased regulatory transparency could also further enhance the appeal of stablecoins. If so, the demand for US Treasury securities from stablecoin issuers could grow from the current level of around 1%. Therefore, this cryptocurrency will not replace the dollar, but rather make the dollar more easily accepted worldwide and reinforce the dollar's long-standing global dominance."