Tether Holdings Stablecoins, especially those pegged to the U.S. dollar, play a crucial role in supporting the American economy by increasing demand for U.S. Treasury bills, according to Howard Lutnick, CEO of custodian Cantor Fitzgerald.
Lutnick voiced his support for stablecoins during a Chainalysis Conference, emphasizing their importance in maintaining the dollar’s global dominance.
“Dollar hegemony is very important for the United States,” said Lutnick, underlining the importance of stablecoins such as Tether (USDT) and Circle (USDC) in supporting the US economy.
Stating that stablecoins, which are cryptocurrencies backed by fiat currencies, are effective in increasing the demand for US Treasury bills, Lutnick also noted that they do not pose a systemic risk to the global financial system.
The CEO’s comments come amid ongoing debate about the role of stablecoins in the crypto market and their impact on traditional financial systems.
With Tether having a market cap of $107 billion and Circle having USDC worth $32.25 billion, stablecoins have become an integral part of crypto trading, serving as funding currencies and collateral for derivatives.
During periods of market volatility, stablecoins have also served as a haven for investors, offering stability amid fluctuations in other digital assets.
Despite concerns raised by the collapse of Terra’s algorithmic stablecoin UST in May 2022, Tether maintained investor confidence by honoring redemptions and reassuring the market about its reserves.
*This is not investment advice.
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