According to a former U.S. House of Representatives speaker, Paul Ryan, the US dollar could maintain pace with the Chinese yuan through dollar-pegged stablecoins.
In an opinion piece published in the Wall Street Journal on June 13, Paul Ryan contended that dollar-backed stablecoins are “one solution” to maintain the dollar’s appeal, as the United States is bound toward a predictable yet preventable debt crisis.
From 2015 to 2019, Ryan was the 54th U.S. House of Representatives speaker. One of the most influential roles in U.S. politics is the House speaker, who can influence the legislative agenda.
Ryan, who currently serves as a policy council member at Paradigm, a cryptocurrency-focused venture capital firm, stated that there would be an instantaneous, durable increase in demand for U.S. debt. This would reduce the risk of a failed debt auction and an attendant crisis.
The $162 billion stablecoin market is already a significant source of demand for U.S. Treasurys, and its role in maintaining the dollar’s dominance “couldn’t be more appropriate,” he emphasized.
This could assist the U.S. dollar in maintaining its “substantial influence over the global financial system” by enabling “cheap, reliable financing for fiscal spending” on blockchain rails.
He observed that China has incorporated the Chinese yuan into various digital infrastructure investment platforms in numerous emerging markets. He further stated that the United States must develop its solution before it is too late.
“The United States cannot afford to remain passive as its largest international competitor capitalizes on the underlying demand for secure and convenient digital currency.”
“Stablecoins backed by dollars provide demand for U.S. public debt and a way to keep up with China.”
Ryan stated that a robust regulatory framework for stablecoins has already garnered bipartisan support in Congress, which has the potential to “dramatically expand the use of digital dollars at a critical time.”
Emin Gün Sirer, CEO of Ava Labs, was among the industry luminaries who commended the opinion piece.
Gün Sirer wrote on X, “Stablecoins are one of the most beneficial developments in the crypto space, and they contribute to the dollar’s global dominance.”
Nevertheless, Adam Gladstein, the chief strategy officer of the Human Rights Foundation, stated that the use of stablecoins would “perpetuate and reinforce” the same financial system that Bitcoin attempts to “subvert and replace.”
