Citigroup: Bitcoin will not end the US dollar, and the popularization of stablecoins will instead consolidate the dominant position of the US dollar

Citi Wealth strategist believes that Stable Coin not only has the potential to strengthen the dominance of the US dollar, but also challenges the idea of BTC ending the dominance of the US dollar one day. (Background: Federal Reserve Board Director Christopher Waller: Stable Coin strengthens the "dominance" of the US dollar, and the global reserve currency status remains unchanged) Citi Wealth stated in a newly released report that the growth of Stable Coin adoption will not harm the US dollar, but may instead "consolidate the long-term global dominance of the US dollar," and challenge the idea of BTC ending the dominance of the US dollar. According to The Block, a Citi Wealth strategist wrote in the report: "Initially, cryptocurrencies such as BTC were considered as competitors to Central Bankissuance currencies. In fact, some people believe (and continue to believe) that BTC may end the dominance of the US dollar, however, Stable Coin, which accounts for more than four-fifths of the Cryptocurrencyvolume, is challenging this view." Citi: Stable Coin challenges the view of "BTC ending the dominance of the US dollar" Citi pointed out that the vast majority of Stable Coin are pegged to the US dollar, and issuance merchants purchase US dollar cash and US Treasury bonds as reserves to support Stable Coin. If the US government takes further action to legalize Stable Coin, it may further consolidate the dominance of the US dollar. Clearer regulation may also further increase the attractiveness of Stable Coin. If so, the demand for US Treasury bonds by Stable Coinissuance merchants may rise by more than the current purchase volume of about 1%. Therefore, Stable Coin will not replace the US dollar, but will make it easier for the world to use the US dollar and consolidate the long-term global dominance of the US dollar. The adoption rate of Stable Coin has been continuously rising in recent years. According to the Citi report, "Stable Coin trading activity reached a historic high, with a trading volume of $5.5 trillion in the first quarter of 2024. In comparison, the trading volume of credit card giant Visa was approximately $3.9 trillion during the same period. To address this challenge, Visa, PayPal, and other traditional payment providers are issuing their own Stable Coin or settling transactions using Stable Coin from other companies to adapt to this trend." Trump also supports the view that Stable Coin will consolidate the dominance of the US dollar? It is worth noting that Trump, who wants to maintain the global dominance of the US dollar, supports BTC, apparently not believing that "BTC will challenge the position of the US dollar," and may even hold a similar view to the Citi report. Trump plans to make the United States the global center of Cryptocurrency, to take the lead in the future Cryptocurrency field, and to persist in opposing the introduction of CBDC digital dollars by the Federal Reserve, which may further promote the legalization of the US dollar Stable Coin and its adoption in the global market, indirectly achieving his goal of consolidating the dominance of the US dollar. Federal Reserve Board Director Christopher Waller also publicly stated this year that people often speculate that cryptocurrencies like BTC may replace the US dollar as the world's reserve currency, but he does not think so. The vast majority of Decentralized Finance transactions involve the use of Stable Coin, with 99% of the market value of these Tokens pegged to the US dollar. Therefore, any rise in transactions in the world of Decentralized Finance may only strengthen the dominance of the US dollar. Further reading: Decentralized FinanceStable Coin monthly volume first "exceeds 700 billion US dollars", comparable to Visa, Standard Chartered: Trump's presidency will rise tenfold IMF warns that Stable Coin will challenge the status of Fiat Currency However, Citi strategists believe that the view that "Stable Coin will consolidate the global dominance of the US dollar" is clearly at odds with the International Monetary Fund (IMF). The IMF has repeatedly warned in recent years that Stable Coin could replace national sovereign currencies and must be closely regulated. It advocates that countries should actively introduce their own Central Bank digital currencies (CBDC) to cope with the challenge of physical cash possibly disappearing due to the rise of Stable Coin, Cryptocurrency, and other diverse digital payment options. In contrast, the IMF is less concerned about the possibility of "BTC replacing Fiat Currency". A Morgan Stanley report earlier this year pointed out that the rise of BTC, Stable Coin, and CBDC has the potential to drive global "de-dollarization," but IMF Managing Director Kristalina Georgieva clearly dismisses this, emphasizing that she is not very concerned about BTC competing with the US dollar, and emphasizing that Cryptocurrency is an asset, not a currency, and is still far from being able to compete with the US dollar. Further reading: Stable Coin may replace national sovereign currencies! IMF: Huge impact on national finances Samson Mow predicts a future of "super Bitcoinization", a sharp drop in demand for Fiat Currency However, BTC OG and advocate for the Fiat Currency of El Salvador, Samson Mow, boldly predicts in a mid-year interview with Dynamic Zone that "BTC will replace the US dollar," and in the future, Stable Coin and BTC may coexist for a period of time, until we reach a turning point of "hyper Bitcoinization," at which point BTC will become the primary store of value and Medium of Exchange, and the demand for Fiat Currency will significantly decrease. Related reports Will BTC replace Fiat Currency? Economic experts pour cold water: "Purchasing power Fluctuation" makes it difficult for BTC to become a popular medium of exchange Can BTC challenge Fiat Currency? Fed's seven charts tell you that replacing the US dollar is "an impossible task"! Circle CEO: The peak of Stable Coin is yet to come! Will increase to 13 trillion US dollars within ten years, with potential surpassing CBDC South Korea's leading encryption venture: XRP started by selling XRP to local moms through a Ponzi Scheme Citi: BTC will not end the dominance of the US dollar, but the popularity of Stable Coin will instead consolidate the dominance of the US dollar This article was first published in Dynamic Zone BlockTempo "Dynamic Zone Trends - The most influential blockchain news media".