Stablecoins at the Heart of a Dollar-Based Revolution, Say Brooks and Calomiris
According to an opinion piece in The Wall Street Journal, stablecoins could play a crucial role in maintaining the dominance of the U.S. dollar as the global reserve currency. The authors, Brian Brooks and Charles Calomiris, emphasized the need for a stable regulatory framework for stablecoins in the United States. Brooks, the former CEO of Binance.US and former chief legal officer of Coinbase, and Calomiris, dean of economics, politics, and history at the University of Austin, argued that stablecoins have the potential to revive the post-World War II system where the dollar was the dominant international currency.
Key Points:
- Stablecoins could help boost the U.S. dollar, which is facing dedollarization concerns.
- Data from the International Monetary Fund shows a decline in the share of U.S. dollar reserves held by foreign central banks.
- Stablecoins provide easier access to the U.S. dollar for people living under hyperinflation.
- Dedollarization could harm the U.S. economy, affecting borrowing costs and consumer purchasing power.
- Stablecoin adoption could increase the demand for dollars globally, independent of governments’ political decisions.
The authors urged Congress to consider the importance of re-dollarizing the global economy and implementing regulations for stablecoins. They highlighted the potential risks of dedollarization, such as increased borrowing costs and higher prices for foreign goods. With stablecoins, the authors argued, citizens of other countries can independently access and demand the U.S. dollar, reinforcing its role as the global reserve currency.
Hot Take
The opinion piece by Brooks and Calomiris emphasizes the significance of stablecoins in preserving the U.S. dollar’s dominance. As dedollarization concerns rise, stablecoins offer a potential solution to boost the dollar’s status as the global reserve currency. Implementing a stable regulatory framework for stablecoins could help maintain the U.S. economy’s stability and protect consumer purchasing power.
By
By
By
By
By