Federal Reserve Study: Dollar Dominance is Cyclical, Stablecoins Bolster Demand
A recent Federal Reserve paper reveals that the U.S. dollar's global dominance in bond markets has historically moved in cycles, not linear decline. Despite challenges, the dollar remains resilient, partly due to the growing stablecoin market.
Issuers like Tether and Circle, holding billions in U.S. Treasury debt, are reinforcing the dollar's role in the digital economy. The study identified three "dollarization waves" since the 1960s, with the dollar reclaiming share post-2008. Emerging markets rely heavily on USD, and China's Renminbi has seen only modest gains.
The burgeoning stablecoin market, now ~ $310 billion (85% USD-pegged), positions issuers as major holders of U.S. Treasurys. This trend prompts regulatory attention, with Europe planning a euro-pegged stablecoin by mid-2026.


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Fed Study: Dollar Dominance Cycles and the Rise of Stablecoins
A recent discussion paper released by the United States Federal Reserve indicates that the U.S. dollar’s prominence in global bond markets has fl...








