This is the subject of my latest column for Bloomberg, and here are just a few points:
The crypto revolution also seems to be heading in some dollar-friendly directions. Much of the recent crypto growth has come in the area of stablecoins, as evidenced by Stripe’s acquisition last week of Bridge. Most stablecoins are denominated in dollars, and are often backed by dollar-denominated securities, if only to avoid exchange rate risk. If “programmed money” has a future, which seems likely, that will greatly help the leading currency – that is, the US dollar.
You may think that other funds will also be arranged. But since stablecoins tend to be more convenient for international trade, and online transactions, the most likely scenario is that stablecoins peg interest to the dollar. The US has the most influence of any nation on how the internet works.
The episode has some important points.
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