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United States dollar-pegged stablecoins could alleviate the government’s debt crisis and help the country's dollar keep up with , which has been flexing its muscle in international trade, says a former House speaker.&nbsp;
“The U.S. is headed toward a predictable yet avoidable debt crisis,” and dollar-backed stablecoins are “one answer” to keep the dollar attractive, <a href="https://www.wsj.com/articles/stablecoins-could-stave-off-a-us-debt-crisis-china-digital-currency-c491d717" target="_blank" rel="noopener noreferrer nofollow">argued</a> Paul D. Ryan in a June 13 Wall Street Journal opinion piece.
Ryan served as the 54th speaker of the U.S. House of Representatives from 2015-2019. The speaker of the House is considered one of the most powerful positions in American politics with an ability to shape the legislative agenda.&nbsp;
“There would be an immediate, durable increase in demand for U.S. debt, which would reduce the risk of a failed debt auction and an attendant crisis,” said Ryan, who now serves as a policy council member at cryptocurrency-focused venture capital firm Paradigm.
The <a href="https://cointelegraph.com/learn/algorithmic-vs-collateralized-stablecoins" rel="noopener noreferrer nofollow">$162 billion stablecoin market</a> already provides a huge source of demand for U.S. Treasurys, and its role in preserving the dollar’s dominance “couldn’t be timelier,” he stressed.
It allows “cheap, reliable financing for fiscal spending” on blockchain rails, which could help the U.S. dollar sustain its “substantial influence over the global financial system.”
<figure><img src="https://s3.cointelegraph.com/uploads/2024-06/ff793d7b-05c9-44f1-995d-9f4abcf20c6a.png">
 <figcaption style="text-align: center;">Source: <a href="https://x.com/MacroScope17/status/1802427078177882466" target="_blank" rel="noopener noreferrer nofollow">MacroScope</a>
 </figcaption>
</figure>
He noted that China has been integrating the Chinese yuan on various <a href="https://cointelegraph.com/news/chinese-digital-yuan-cbdc-used-first-time-settle-cross-border-oil-deal" rel="noopener noreferrer nofollow">digital infrastructure investment platforms</a> in several emerging markets and that the U.S. must now find its own solution before it’s too late.
“The U.S. can’t afford to sit idly as its largest international competitor taps latent demand for safe and convenient digital money.”
<blockquote>
 “Stablecoins backed by dollars provide demand for U.S. public debt and a way to keep up with China.”
</blockquote>
Ryan said a <a href="https://cointelegraph.com/learn/stablecoin-regulations-in-the-us-a-beginners-guide" rel="noopener noreferrer nofollow">formidable regulatory framework</a> for stablecoins already has <a href="https://cointelegraph.com/news/us-stablecoin-bill-dollar-congress" rel="noopener noreferrer nofollow">bipartisan support</a> in Congress, which could help “dramatically expand the use of digital dollars at a critical time.”
Related: <a href="https://cointelegraph.com/news/yield-bearing-stables-not-money-stablecoins-says-agora-ceo-van-eck" rel="noopener noreferrer nofollow">‘Yield-bearing stables’ are not money or stablecoins: Agora’s van Eck</a>
The opinion piece received <a href="https://x.com/pythianism/status/1801793116602830914" target="_blank" rel="noopener noreferrer nofollow">praise</a> from several industry leaders, including Emin Gün Sirer, CEO of Ava Labs.
“Stablecoins are one of the best things to come out of crypto, and they help maintain the dominance of the dollar around the world,” Gün Sirer <a href="https://x.com/el33th4xor/status/1801969025141874705" target="_blank" rel="noopener noreferrer nofollow">posted</a> to X.
However, Adam Gladstein, the Human Rights Foundation’s chief strategy officer, <a href="https://x.com/gladstein/status/1802298344272023641" target="_blank" rel="noopener noreferrer nofollow">said</a> more <a href="https://cointelegraph.com/news/how-to-use-stablecoins-for-everyday-transactions" rel="noopener noreferrer nofollow">stablecoin use</a> would continue to “perpetuate and reinforce” the same financial system that Bitcoin serves to “subvert and replace.”
Magazine:<a href="https://cointelegraph.com/magazine/unstable-coins-de-pegging-bank-runs-other-risks-2023/" rel="noopener noreferrer nofollow"> Unstablecoins: Depegging, bank runs and other risks loom</a>

Stablecoins would help US keep up with China: Former House speaker

Cointelegraph

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