Bitcoin and Gold Will Save the World from De-Dollarization – Dominic Frisby
The world has entered an era where gold and bitcoin are the main assets that help preserve wealth and support the dominance of the US dollar, says Flying Frisby newsletter author and MoneyWeek chief columnist Dominic Frisby.
De-dollarization is gaining momentum, reminiscent of the “Nixon shock” of 1971, when the United States abandoned the gold standard, Frisby believes. China, the United States’ largest creditor, has been steadily reducing its holdings of U.S. Treasuries for a decade now and has been sharply increasing its gold reserves. Gold has already overtaken the euro as the second-most popular asset in central bank portfolios, surpassing U.S. Treasuries as a share of global reserves.
“There is currently no other fiat currency that can take on the role of the world's reserve currency. Against this backdrop, Bitcoin as the leading cryptocurrency complements gold in the digital world, where, along with gold, it is positioned as an alternative to the dollar,” the MoneyWeek columnist emphasized.
The US government has legalized dollar stablecoins as a private replacement for the digital dollar, Dominic Frisby recalled. According to the provisions of the GENIUS Act, stablecoins can be issued with mandatory reserves of 1:1 based on US dollars, short-term Treasury bonds, or similar liquid assets such as Bitcoin.
Large stablecoin issuers hold up to 18% of their reserves in risky assets, including Bitcoin and other crypto assets. Moreover, the growth in demand for stablecoins correlates with the growth of issuers' reserves in gold and the first cryptocurrency, Frisby said.
The issuer of the largest stablecoin by capitalization USDT, Tether, which has become one of the significant holders of US Treasury bonds, announced the accumulation of 80 tons of gold and an increase in its own bitcoin reserves to 10,424 BTC. As of September 12, Tether has issued more than 174 billion tokens into circulation and expects to maintain an average monthly rate of emission of USDT stablecoins at 2.9%, including through the release of the asset in the Ethereum and Solana ecosystems.
Analysts at the Federal Reserve Bank of Kansas City expect that by 2035 the market for stablecoins, whose liquidity is provided by a reserve of bitcoins, could double, from $250 billion to $500 billion.
In other words, Frisby concludes, the growth of the stablecoin market will help the US finance its debt and maintain the dominance of the American currency, which, in turn, will stimulate the growth of issuers' reserves in gold and bitcoin.
Earlier, the author of the personal finance book Rich Dad Poor Dad, Robert Kiyosaki, said that gold, silver and bitcoin will help investors preserve capital during the impending economic collapse.
Source: cryptonews.net
