- The World Economic Fund published a report stating Stablecoins have the power to challenge the dominance of the U.S. dollar in the market.
- This report was published on November 26, 2019, by John Liu and Peter Lyons of Fusion Foundation and Lapa Capital respectively on WEF’s Agenda platform.
- Liu and Lyons suggest that these types of situations could be avoided by the use of more sustainable and reliable stablecoins.
John Liu of Fusion Foundation and Peter Lyons of Lapa Capital together gave a statement stating that stablecoins may be used in the upcoming future to break the dominance of U.S. Dollar in the market. And this argument was published by WEF’s Agenda team.
62% of foreign reserve in U.S. Dollars
In the current market scenario, USD holds a very strong position by holding about 62% of foreign reserves in central banks.
Dollars’ dominance creates a threat like 2008’s financial crisis that happens because global investors lost faith in the U.S. dollar and a sudden mass-selling was seen against it creating a sharp decline in the market curves.
Liu and Lyons suggest that these types of situations could be avoided by the use of more sustainable and reliable stablecoins.
The Governor of the Bank of England suggests that an assorted cryptocurrency that would be distributed in most of the larger and strong currency will reduce the dominance in the global market and will create a new era of reserved currency.
Can blockchain prove to be a worthy way of averting the imbalance created?
The main point which came forward from the report of Liu and Lyons was that stablecoins must emphasize the interoperate able feature of blockchain, it will be the main factor in creating a state of balance in the trade flow.
If blockchain platforms fail to maintain so it would create another more powerful currency that will dominate the global trade market and which would become even tougher to replace, more than USD.