Stablecoin survival: Navigating the future amid global de-dollarization
It is an empirical fact that the United States dollar is continuing to lose its dominant role as the global reserve currency, but what might happen to the stablecoin market should it be superseded?
According to data from the International Monetary Fund, the U.S. dollar now accounts for just over 58% of global foreign exchange reserves, a considerable decrease from the 71% share it had in 2001.
Jeremy Allaire — the CEO of USD Coin (USDC) issuer Circle — highlighted this shift at the April 26 Consensus 2023 conference, arguing that the U.S. must implement stablecoin legislation and digitize the U.S. dollar to remain competitive amid the “very active de-dollarization taking place.”
De-dollarization refers to the process of reducing the use of the U.S. dollar in a country’s economy, and powerhouses like Russia and China are actively pursuing de-dollarization as they look to replace the U.S. dollar with digital assets, other fiat currencies, and potentially a BRICS currency between Brazil, Russia, India, China and South Africa.
As an example of this de-dollarization taking place, the Chinese yuan has recently overtaken the U.S. dollar as China’s most used cross-border currency according to Bloomberg, increasing to a high of 48% of transactions after it made up nearly 0% in 2010.
Chinese Yuan overtakes US dollar as most-used currency in China's cross-border transactions for the first time in history.Yuan-share rose to a record high of 48%, UP from nearly zero in 2010. U.S-share declined to 47%, DOWN from 83% over the same period.Wow. pic.twitter.com/Lm3Rygpm45
Another example that may be more familiar to crypto users can be seen in El Salvador, which in 2021 became the first country in the world to use Bitcoin (BTC) as a legal
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