Stablecoins is an answer to the trade deficit and dollar dominance – Opinion

  • Stablecoins may help to reduce risks to the global economy.
  • The digital currencies should bet compatible and interoperable.

Widespread use of stablecoins can reduce the systemic risks associated with the dominance of the US dollar in the reserves of world central banks. Researchers from the Fusion Foundation and Lapa Capital, John Liu and Peter Lyons came to this conclusion after studying the issue/

They believe that this type of digital assets will create a foundation for a sustainable global system in the areas of trade and investment, banking and payments.

Since the share of the dollar in world reserves reaches 62%, the collapse of this currency will inevitably lead to a crisis and the destruction of the financial system.

Global scarcity of USD creates major headwinds for US exporters, widening the trade deficit and pressuring economic growth, the experts wrote 

At the same time, they emphasized that stablecoins should be compatible with each other and support two-way data exchange between blockchains.

To reduce the risk of any single stablecoin becoming systemically dominant (and simply replacing a fiat hegemon with a digital one), there should be an emphasis on interoperability and frictionless exchange across blockchains. Blockchain interoperability can increase economic and transactional scalability, speed and security, the researchers concluded.

Earlier, a member of the ECB's board of governors, Benoit Coeure, said that the central banks' digital coins might cushion the consequences of cashless society.

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