Don't think too beautiful! Citigroup: BTC cannot beat the US dollar, Stable Coin is more beneficial to the US dollar

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Citigroup’s wealth in the latest report states that the adoption and growth of stablecoins could “consolidate the long-term global dominance of the US dollar,” which also challenges the notion that Bitcoin will end the dominance of fiat currencies.

Stablecoin trading volume accounts for over 80% of cryptocurrencies, and clear regulations will definitely increase its attractiveness.

According to The Block, Citigroup’s wealth strategist believes that stablecoins not only have the potential to strengthen the dominance of the US dollar, but also challenge the idea that Bitcoin will one day end the US dollar’s hegemony.

Initially, cryptocurrencies such as Bitcoin were considered competitors to central bank-issued currencies. In fact, some people believe that Bitcoin may end the dominance of the US dollar. However, Citigroup wrote in a new report: Stablecoins, which account for more than four-fifths of cryptocurrency trading volume, are challenging this view.

Because most stablecoins are pegged to the US dollar, and the issuers hold US dollars and US Treasury bonds as reserves. If the US government takes further measures to legalize stablecoins, it may strengthen the dominance of the US dollar.

Clearer regulation could also further enhance the attractiveness of stablecoins. The demand for U.S. Treasury bonds by stablecoin issuers may increase by about 1% of the current purchase volume. Therefore, this type of cryptocurrency will not undermine the status of the U.S. dollar, but instead make it easier for the world to obtain dollars and consolidate the long-standing global dominance of the U.S. dollar.

Stablecoin trading volume surpasses Visa

Stablecoin trading volume has also reached a new all-time high, with a transaction value of $5.5 trillion in the first quarter of 2024. In comparison, Visa’s transaction volume is approximately $3.9 trillion.

To address this challenge, Visa, PayPal and other traditional players are also adjusting by offering their own stablecoins or settling transactions in other companies’ currencies.

According to CoinGecko’s data, the total market capitalization of stablecoins has reached a new historical high, exceeding $200 billion, a growth of 13% in the past month. Among them, USDT still sits on the throne with a total market capitalization of $138.6 billion. USDC has a market capitalization of $41.5 billion, and the third place is the rapidly rising USDe, whose market capitalization has doubled from $2.5 billion at the beginning of October to $5.6 billion.

【Disclaimer】There are risks in the market, and investment needs to be cautious. This article does not constitute investment advice. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their specific situation. Investment based on this is at your own risk.

This article is authorized to be reprinted from: “Chain News”

Don’t be too optimistic! Citigroup: Bitcoin cannot defeat the US dollar, stablecoins are more beneficial to the US dollar. This article was first published in ‘Crypto City’.