Nearly all stablecoins in the market are pegged to the US dollar, making it a significant challenge to free them from the stronghold of the American currency. Recent attempts have been made to reduce this dependency by linking stablecoins to various currencies and commodities, but achieving success has proven difficult. Stablecoins are digital currencies designed to provide price stability, protecting investors from the volatility typical of cryptocurrencies. Typically, they function as tokens backed by the US dollar, offering users lower-risk investment opportunities within the crypto market. This reliance reinforces the US dollar’s dominance in the global financial system, with stablecoins largely dependent on it.
Some companies and digital currency projects have introduced stablecoins tied to currencies other than the dollar or to commodities such as gold, oil, and other goods, aiming to create a more diversified financial platform with reduced dependence on the US currency. However, these efforts have not gained widespread market acceptance, as the majority of users still prefer dollar-pegged stablecoins. This situation reflects the difficulty of replacing the US dollar’s role in the global financial system, especially in the realm of digital currencies. Should an alternative financial system emerge in the future, it could bring significant changes to the global economy and the crypto market structure, but it would require broad trust and acceptance.
Currently, the strong link between stablecoins and the US dollar remains intact, and the dollar’s strength indicates that the process of stablecoins gaining independence is still in its early stages, necessitating further research and experimentation.
Source: decrypt
