🌍 Stablecoin dollarization entrenches the dollar's reserve status

“So I think it's a really big deal, certainly for people in those countries, and in some sense also for the US, because the dollar status as the world's reserve currency, I think is in the process of becoming much more deeply established.”

“Having USDC, having yours and other ones in the United States means we can regulate them and they have to buy treasuries. And so, okay, dollar supremacy continues, and that's fantastic.”

“But this is what I've been saying to Jay Cal, de-dollarization is what ends up happening.”

“And then beyond that, you also have the problem of what happens if there's just less demand for dollars on the world stage. The exit of the dollar as the world's global reserve currency is going to have some pretty nasty spillover effects.”

“Well, and this is what the stable coins, I think, is set up to counter. ... force them to buy a certain percentage of treasuries, and allow them to give interest, which the stable coin bills are now debating if they should give that. So I don't know if you guys are watching that, but that would be the greatest way to keep a buyer for our currency.”

“The thing that US dollar stable coins does is it starts to replicate one of those advantages, which again, if you think about having a release fell for the US economy, and if we need it to, all of a sudden scream to 200% debt to GDP, the real question is where is the incremental net buyer of the US bond? And it could be the person that has to back the stable coin”

“The foreign exchange market is very big, and it's a big referendum on whether people have confidence in the United States. And somehow, tariffs reduce imports, are supposed to reduce dollar selling and make the currency go up. And not only is the currency not going up, it's going down substantially.”

“So it is true that the number one stablecoin issuer on the planet right now is an offshore company. ... And then also Tether will under this act, will have three years to come onshore. But the bottom line is they will have to operate in the United States. And that's a good thing for consumers. It's a good thing for the US.”

“What could be bad about allowing digital dollars, which extends the dollar's dominance online, so that it basically bolsters the dollar status as the world's reserve currency. Over time, as we get challengers from BRICS, for example, this is going to make the US dollar stronger. And every time a dollar token trades somewhere in the world on a crypto wallet, there has to be a physical dollar in a US bank account invested in a US treasury. And that creates demand for our debt, which is another positive thing.”

“I'll make one more point before I jump off on the tether topic. The one thing that I think your viewers should know is, this year, they'll be the fourth largest purchaser of US Treasuries. I think that's something that we should really contemplate.”

“I was always worried about stable coins, the risk to the dollar. But I think you make a very good point that when you are the dominant currency, they entrench the dominance.”

“And in order to be in the US market, Tether is going to have to be 100% in treasuries, right? They're not going to be allowed to be, say, in real estate.”

“This is about taking America's payment system in the 21st century. This is about making our nation more competitive. This is about expanding demand for the US Treasury securities that we issue. This is about the dominance of the US dollar.”