Kansas City Fed says dollar stablecoins reinforce U.S. dominance

A Kansas City Fed report argued dollar-based stablecoins could strengthen, rather than weaken, the dollar’s dominance, according to Crypto Briefing. The report was jointly released by Circle executive Gordon Liao, Cornell University economics professor Eswar Prasad, and economist Tony Zhang, and pointed to global payments as a key factor. The authors said 98% of stablecoins are denominated in U.S. dollars and that global users overwhelmingly prefer dollar-pegged assets over euro- or yuan-based alternatives for cross-border payments. They added that stablecoin issuers place most of their reserves in short-term U.S. Treasurys and cash-equivalent assets, and said no credible rival has yet emerged to replace the dollar in the stablecoin market, while euro-based stablecoins account for only a very small share of total supply.