A recent banking report suggests dollar-backed stablecoins are extending U.S. monetary influence abroad while the underlying capital remains within the country. The demand for these digital dollars is converted into U.S. Treasury purchases, aiding deficit funding. Concurrently, non-USD stablecoins are gaining traction, with their combined market cap reaching approximately $1.55 billion after a 260% supply surge over the past year. The practical use of stablecoins is evident in the rapid growth of crypto card payments, now an $18 billion market with monthly volumes exceeding $1.5 billion.
A report by Rabobank has stated that dollar-backed stablecoins are spreading dollar influence, without letting real dollars leave the country. The idea is that when a foreign firm wants a dollar stablecoin, a U.S. issuer converts that demand into Treasury bill purchases.
In trade, U.S. importers can pay exporters in stablecoins, while the underlying dollars stay parked in Treasuries. With comparisons to the Soviet-era trade ruble, dollars are exported digitally while keeping the power at home.
That growing influence hasn’t gone unnoticed, with non-USD-pegged alternatives gaining ground. Over the past year, non-USD stablecoins have surged 260% in supply, pushing their combined market cap to about $1.55 billion.
It’s still small next to dollar-backed giants, but it certainly matters. One of the fastest-growing payment modes for stablecoins right now is crypto cards.
Once a niche product, crypto cards are now an $18 billion market. Monthly volumes went from about $100 million in early 2023 to over $1.5 billion today, growing at a 100%+ annual rate.
Importantly, these cards don’t replace Visa or Mastercard. Rather, they sit on top of them, with stablecoins funding the transaction in the background while card networks handle acceptance.
