A Bitcoin policy researcher states that U.S. dollar-pegged stablecoins and Bitcoin share a mutually reinforcing “symbiotic” relationship, contradicting narratives that cryptocurrency undermines the dollar. He argues that, similar to the petrodollar system, the dominance of dollar-based trading pairs for BTC drives demand for the currency. The analysis also addresses China’s persistent bans on permissionless crypto assets, noting they have failed to stop activities like Bitcoin mining and stablecoin flows, with Chinese mining pools still controlling over 36% of the global hashrate.
According to Sam Lyman, head of research at the Bitcoin Policy Institute, Bitcoin and dollar-pegged stablecoins have a symbiotic relationship that benefits the U.S. financial system. “Bitcoin is beneficial to the US system because the largest Bitcoin trading pair is BTC/USD,” or Tether’s USDT stablecoin, Lyman stated.
He compared this dynamic to the petrodollar system, where international oil sales priced in dollars generate currency demand. Lyman urged U.S. lawmakers to advance stablecoin regulations like the GENIUS framework to protect dollar hegemony.
Conversely, China views these technologies as a threat to its capital controls. Lyman explained that “the entire Chinese economy depends on capital controls” to prevent wealth from leaving the country.
This has led China to repeatedly ban Bitcoin and stablecoins while promoting its digital yuan. Despite official prohibitions, permissionless crypto activity continues within its borders.
Chinese mining pools still control more than 36% of the global Bitcoin mining hashrate, as reported by Hashrate Index. The bans have not succeeded in curtailing stablecoin flows or mining operations.
