BRICS vs US Dollar: Can Stablecoins Make Dollar Alternatives Harder to Implement?

BRICS vs US Dollar: Why Stablecoins Are Key to Global Payment Systems

BRICS vs US Dollar – Christopher Waller, a Federal Reserve Bank Governor, has expressed his support for the adoption of stablecoins, emphasizing that clear regulatory frameworks are essential for their growth. In a Feb. 6 interview with the Atlantic Council, Waller stated that stablecoins could enhance the global influence of the US dollar and solidify its position as the world’s reserve currency. He noted that stablecoins have the potential to broaden the reach of the dollar, providing new opportunities for payments and expanding its role in international trade.

Stablecoins and the US Dollar as a Reserve Currency

Waller believes that stablecoins could play a pivotal role in strengthening the dollar’s global dominance. He explained that stablecoins offer a digital alternative to traditional payment systems, making transactions more efficient and accessible. According to Waller, with good regulation, stablecoins could significantly reinforce the dollar’s status in international finance and investments. This would help the US maintain its leading role in the global economy.

Impact of Stablecoins on Global Payments

A recent Andreessen Horowitz report from October 2024 highlighted that over 99% of stablecoin transactions are denominated in US dollars, with the most widely traded stablecoin, Tether (USDT), commanding nearly 80% of the market share. Waller sees stablecoins as a net positive addition to the global payment system, noting that regulatory oversight is crucial to ensure their backing and legitimacy.

Challenges from BRICS and Other Nations

The rise of BRICS countries (Brazil, Russia, India, China, and South Africa) has fueled concerns about the dominance of the US dollar. BRICS has actively sought alternatives to the dollar in international trade. Waller suggests that stablecoins could make these efforts much more difficult, as they would be harder to regulate or confiscate compared to physical cash.

Regulatory Developments and Future Prospects

The US stablecoin market is undergoing significant regulatory changes. On Feb. 4, Senator Bill Hagerty introduced the GENIUS stablecoin bill, which aims to create a regulatory framework for US-dollar-pegged cryptocurrencies. The proposed legislation would empower the Federal Reserve to oversee stablecoin issuers with a market capitalization exceeding $10 billion, while state regulators would oversee smaller issuers.

In addition, the stablecoin market has seen rapid growth, surpassing $200 billion in market capitalization as of January 2025, with transaction volumes reaching an impressive $27.6 trillion in 2024—exceeding the combined volumes of Visa and Mastercard by 7.7%.

As the regulatory landscape for stablecoins evolves, their role in the global economy is expected to expand, further cementing the US dollar’s dominance in international trade.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.