The supply-demand paradigm has changed after inflation has reached its highest pace in the US. Imports are getting costlier and the Fed wants to outdo the status quo of dollars that stands challenged by parallel networks.
How the Dollar Can Retain Its Status?
Market and political stability along with depth will be necessary for sustaining the dollar. If the US has to maintain its dollar status, they need to perform at par with the international requirements. At the moment, China has been overtaking the United States as the world power.
If the dollar fails to control its inflationary pressure, it would mean that cryptocurrencies will look for other alternatives. Till then, as long as the stable coins are pegged to the dollar and the dollar could maintain its stability, there’s lesser chances of CBDCs to emerge.
The main reason for the same is CBDCs give full control to the government to track the funds. On top of this, the government can also very likely influence the spending habits of the consumers. All of these make stable coins a much better alternative to replace the traditional dollar and back the same with stable coins.
Many experts believe that instead of crypto weakening the dollars, it could further strengthen the same if proper use-cases build around the dollar.
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