Wall Street Journal journalists have published an article suggesting that #stablecoins will allow the US dollar to maintain its leading position in the global market and continue serving as the primary reserve currency. Economists Brian Brooks and Charles Calomiris are urging Congress to establish an effective and sustainable legal framework to actively develop stablecoins in the US.
A bill to regulate payments in stablecoins was proposed in July of this year by House Financial Services Committee Ranking Member Patrick McHenry. However, this proposal has faced a series of challenges as a bipartisan agreement has not been reached.
According to Brooks and Calomiris, there are increasing discussions about global de-dollarization. However, the experts emphasize that stablecoins can help avoid such a scenario. This asset class can replicate the post-war scenario when the US dollar became the key international currency.
It's worth noting statistics provided by IMF analysts. According to the data presented, the share of dollar assets held by global central banks has decreased from 73% to 59% over the past 22 years.
Brooks and Calomiris pointed out that the largest outflow of dollar assets is primarily observed from resource-exporting countries. For example, Brazil and Argentina have ratified agreements with China to use the yuan, real, and peso for mutual settlements.
The economists also highlighted that a sustainable de-dollarization could seriously damage the US economy. The essence is that further development of such a scenario would reduce the purchasing power of the American currency, significantly increasing the cost of imported goods.
