Blockchain technology is fortifying the strength of the US dollar rather than weakening it, according to the digital asset investment firm Pantera Capital.
In a new analysis, Jeff Lewis, Pantera’s hedge funds product manager, and Erik Lowe, the firm’s head of content, write that blockchain tech will reverse a decades-long trend of international de-dollarization.
“Far from eroding the dollar’s supremacy, blockchain technology has created a digital infrastructure that fortifies it. The ability to tokenize and mobilize dollar assets globally allows the dollar to remain indispensable even as geopolitical and technological forces drive de-dollarization pressures.
As J.P. Morgan noted in their report, the structural factors supporting the dollar’s dominance — deep capital markets, rule of law, and institutional transparency — remain unparalleled. Stablecoins extend these advantages to a digital, borderless context.”
Lewis and Lowe note that 18 of the top 20 fiat-backed stablecoins have the letters USD in their names.
They also note Bitcoin (BTC) is now increasingly perceived as a store of value rather than a medium of exchange and a threat to the US dollar.
“The stablecoin/RWA (real-world asset) phenomenon has risen up to allow blockchain to make good on Bitcoin’s initial promise, by providing a means of exchange with stability and, ultimately, yield. Rather than eroding the dollar’s relevance, it is amplifying it.”
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