How crypto can save the dollar

Stablecoins as a key to maintaining “exorbitant privilege”

Source: TradingView

Stablecoins USDC and USDT recently passed $170B in market cap. Backed by Treasuries, cryptodollars can help protect the dollar’s “exorbitant privilege” in a new monetary era.

U.S. Treasuries — the keystone of the financial system — have been in crisis. Unchecked government spending has led to a flood of bonds on the open market. (And painful returns for countless investors and institutions).

Similarly, in 2021 nearly 7 trillion dollars flooded into the economy overnight by government and central bank stimulus. Inflation then surged to levels not seen since the 1970s (when the gold standard was broken).

So how do you solve for systemic oversupply of dollars and bonds (and protect the American financial system)? It’s simple: stop the flooding supply AND/OR find new ways to generate demand. Enter stablecoins.

According to Circle, its ~$38B in USDC issued is backed 1:1 by cash and U.S. Treasuries in reserve. Meanwhile, the incoming Commerce Secretary uses his firm Cantor to hold billions of dollars in Treasuries (as reported by…