global dominance of the dollar
The post global dominance of the dollar appeared on BitcoinEthereumNews.com. Stablecoin is redefining the balance in the global financial system. Over 99% of the total value amounting to 247 billion dollars is indeed denominated in US dollars, leaving alternative currencies with a marginal role. This trend raises serious strategic questions for China and the future of the yuan in international transactions. Stablecoin market and devaluation risk for the yuan The dominance of the dollaro in stablecoin represents a direct challenge to the internationalization of the yuan. In May 2024, the share of the yuan in cross-border payments stood at 2.89%, the lowest level in the past two years. In comparison, the dollaro continues to hold nearly 48.5% of global transactions through the SWIFT network. Wang Yongli, former vice head of the Bank of China and co-chairman of the Digital China Information Service Group, emphasized how the expansion of stablecoin pegged to the US dollar represents a strategic threat to the competitiveness of the yuan in international transactions. If yuan payments are not equally efficient, China risks losing significance on the global monetary scene. The forecast by Standard Chartered estimates an expansion of the stablecoin market up to 2 trillion dollars by 2028, provided there is clearer and more dynamic regulation. Consequently, the pressure on China to adapt with its own stablecoin has grown exponentially. Hong Kong has quickly transformed into a crossroads of experimentation for the regulation of digital assets, including stablecoin. Its regulatory framework imposes strict safeguards: reserves must be composed of high-quality liquid assets, separated from company funds, and protected from creditors. Additionally, those who issue stablecoin in Hong Kong must have a minimum capital of 25 million Hong Kong dollars or 1% of the issued value, ensuring financial solidity. A crucial aspect is the obligation to allow the riscatto of stablecoins at face value within one business…
The post global dominance of the dollar appeared on BitcoinEthereumNews.com.
Stablecoin is redefining the balance in the global financial system. Over 99% of the total value amounting to 247 billion dollars is indeed denominated in US dollars, leaving alternative currencies with a marginal role. This trend raises serious strategic questions for China and the future of the yuan in international transactions. Stablecoin market and devaluation risk for the yuan The dominance of the dollaro in stablecoin represents a direct challenge to the internationalization of the yuan. In May 2024, the share of the yuan in cross-border payments stood at 2.89%, the lowest level in the past two years. In comparison, the dollaro continues to hold nearly 48.5% of global transactions through the SWIFT network. Wang Yongli, former vice head of the Bank of China and co-chairman of the Digital China Information Service Group, emphasized how the expansion of stablecoin pegged to the US dollar represents a strategic threat to the competitiveness of the yuan in international transactions. If yuan payments are not equally efficient, China risks losing significance on the global monetary scene. The forecast by Standard Chartered estimates an expansion of the stablecoin market up to 2 trillion dollars by 2028, provided there is clearer and more dynamic regulation. Consequently, the pressure on China to adapt with its own stablecoin has grown exponentially. Hong Kong has quickly transformed into a crossroads of experimentation for the regulation of digital assets, including stablecoin. Its regulatory framework imposes strict safeguards: reserves must be composed of high-quality liquid assets, separated from company funds, and protected from creditors. Additionally, those who issue stablecoin in Hong Kong must have a minimum capital of 25 million Hong Kong dollars or 1% of the issued value, ensuring financial solidity. A crucial aspect is the obligation to allow the riscatto of stablecoins at face value within one business…
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