Can crypto extend the dollar’s global power?

00:00 Speaker A

To keep the token redeemable, the issuer holds reserve assets against it.

00:04 Speaker A

Under the American framework, those reserves must be maintained at least one to one and generally consist of cash and highly liquid short-term instruments such as treasury bills and overnight repos backed by treasury securities.

00:20 Speaker A

So a person in Argentina, Turkey or Nigeria, who moves savings into a regulated dollar stable coin may indirectly create demand for US government debt.

00:30 Speaker A

The user gets digital dollars but generally no yield from the token itself.

00:35 Speaker A

The issuer and its distribution partners capture the reserve income.

00:39 Speaker A

The US Treasury gets another buyer.

00:43 Speaker A

It's an extraordinary arrangement.

00:44 Speaker A

America can export its currency without printing and shipping a single physical bill.

00:50 Speaker A

Private companies handle the software, distribution and customer acquisition.

00:54 Speaker A

Public blockchains handle the settlement.

00:56 Speaker A

Users around the world provide the capital and a portion of that capital flows back into the market that finances the United States government.

01:03 Speaker A

Stablecoin issuers have already become significant holders of treasu of short-term treasury securities.