Pantera: The satirical answer to de-dollarization, the 'killer app' of cryptocurrency could be the dollar itself.

Block chain finance has developed so far, and the strongest application is Liquidity, which is built on the dollar itself, which seems to be contrary to the goal of de-dollarization. This article originated from Jeff Lewis, product manager of Pantera hedge fund, and "Crypto: The ironic answer to de-dollarization" co-authored by content director Erik Lowe. (Synopsis: Trump's cruel words: BRICS countries dare to "de-dollarize" and impose 100% tariffs!) (Background added: Accelerating de-dollarization) Russian cooperation BRICS countries push new payment system to "replace Swift": 159 countries have responded to join) The trend of de-dollarization is intensifying, and more and more countries and institutions have begun to decentralize their dependence on the dollar in global trade and financial transactions, which has also raised market concerns about the long-term dominance of the dollar. The most common measure of dollar dominance, the dollar's share of global forex reserves, has seen a long-term decline since 2000, with a cumulative decline of 13 percentage points. We believe this trend is about to reverse, and ironically, the driving force behind this shift is what most U.S. policymakers and Central Bank officials saw five years ago as accelerating the dollar's decline: Block Chain Technology and Asset Tokenization. What was once seen as a technology that could upend the dollar's position is now the biggest driver of strengthening the dollar's advantage. "The most ironic outcome is often the most likely to happen." — Elon Musk Ultra-Enhanced Dollar The public Block chain empowers fiat coins, delivering them directly to the fingertips of 5 billion smartphone users around the world and making cross-border flows of funds barrier-free. The demand for Fiat currency tokenizations, such as Stable Coin, has spawned a massive $200 billion industry — with the U.S. dollar firmly dominating the market. A report released by Castle Island and Brevan Howard includes a chart showing that the US dollar has an almost 100% overwhelming advantage as a collateral asset in the Stable Coin market, far outpacing other economic classes. Among the top 20 Fiat Currency-backed Stable Coins, 16 have "USD" in their names. In the 16 years since the Block chain came out, the general perception of it has hardly changed. Early proponents of BTC did believe that cryptocurrency had the potential to challenge the dominance of the US dollar. However, in recent years, BTC has become increasingly seen as a store of wealth rather than a medium of exchange, which has also significantly removed its threat to the dollar. The rise of Stable Coin and Tokenization (RWA) of physical assets has allowed the Block chain to fulfill BTC's original promise of "Decentralization Coin", providing a stable and even profitable medium of exchange. This not only does not diminish the importance of the dollar, but further amplifies its influence. In emerging markets, the dollar-backed Stable Coin becomes a practical alternative to holding physical cash or relying on a vulnerable banking system. For countries where the cryptocurrency is unstable, once there is a choice, merchants and the public will increasingly prefer the stability of the digital dollar. In a report by Castle Island and Brevan Howard, a survey of existing cryptocurrency users in emerging markets shows that the demand for savings denominated in US dollars is an important driver for the adoption of Stable Coin in emerging markets. 47% of respondents said that their main use of Stable Coin is to store funds in US dollars (this percentage is only slightly lower than the 50% that say they are mainly used to trade cryptocurrency or non-fungible tokens). 69% of respondents have exchanged their domestic coins for Stable Coin, and this exchange has nothing to do with trading. 72% of respondents expect to increase their use of Stable Coin in the future. Note: Countries covered include Nigeria, Indonesia, Turkey, Brazil and India Whether it is a consumer with a small amount of money or a multinational corporation, when economic participants tend to choose the safest and most liquid option, the US dollar may gradually squeeze the space for other local coins. In America's Best Interest – Stable Coin Legislation 2025? Legislative momentum for Stable Coin is accelerating, and it is widely expected that such regulatory bills will be passed during the Trump administration. The Stable Coin bill, originally introduced in 2023 by Patrick McHenry, was recently introduced to the House by Rep. Maxine Waters and has bipartisan support. The Stable Coin legislation has been seen as the first step toward regulatory clarity in the United States. In our view, 2025 will see substantial progress, especially as policymakers become more aware of Stable Coin's strategic role in expanding the dollar's influence. Stable Coins are in the best interest of the U.S. because they increase the percentage of transactions denominated in U.S. dollars and drive demand for U.S. Treasuries as collateral. For a country with $37 trillion in outstanding debt, diversification and liquidity is critical, and the Encryption market is just the right way to do that. Stable Coin vs. Central Bank Digital Coin (CBDC) To avoid confusion, a clear distinction must be made: Fiat Currency-backed Stable Coin and Central Bank Digital Coin (CBDC), while technically similar, are essentially two distinct concepts. J.P. Morgan released a report on the de-dollarization trend last October, which pointed to emerging technologies seeking payment autonomy as a potential driver of de-dollarization. The report mentions multinational Central Bank digital coin (CBDC) cooperation programs like mBridge as a possible alternative to dollar trading. However, while emerging payment systems such as foreign CBDCs may exacerbate de-dollarization pressures, we believe the rapid rise of the dollar-backed Stable Coin market could help offset this trend. In our view, Stable Coins based on Decentralization, permissionless Block Chain technology will become the preferred choice in the market because they offer better privacy, censorship resistance, and cross-platform interoperability. Driving demand for U.S. Treasuries through tokenized products According to the U.S. Department of the Treasury. Department of the Treasury), about $120 billion of Stable Coin-backed assets are currently invested directly in U.S. Treasuries, further driving demand for short-term Treasuries. In addition to Stable Coin, the direct tokenization of U.S. Treasuries is also a fast-growing trend. Companies like BlackRock, through Securitize, Franklin Templeton, Hashnote, and Pantera's portfolio company, Ondo, are leading the $4 billion emerging market. Ondo's two core products USDY (US Dollar Yield Token): A tokenized note backed by short-term U.S. Treasuries and bank deposits that provide stable and high-quality returns to non-U.S. investors. OUSG (Ondo Short-Term U.S. Government Treasuries): Provides high-liquidity investment access to short-term U.S. Treasuries, qualified investors can make mint (purchase) and ...