Vitaliy Shtyrkin is CPO at B2BINPAY.
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The financial landscape has been undergoing a seismic shift as digital assets, particularly stablecoins, rise to prominence. As we know, this standalone type of cryptocurrency aims to maintain price stability by pegging their value to established currencies like the U.S. dollar.
However, the dollar is increasingly viewed as a problematic reference point in the global economy and the digital asset realm.
While the US dollar has traditionally served as the standard reference point for stablecoin valuation, its dominance is being challenged by emerging alternative currencies and economic shifts.
The dollar's status as the world's reserve currency means that its fluctuations are heavily influenced by U.S. monetary policy, geopolitical tensions, and economic indicators. All these factors might not represent the interests of decentralization-minded users and those living in regions whose economies and financial systems aren’t U.S. focused and/or dollar-pegged.
However, there are even more straightforward considerations casting a shadow over the indebted-currency-pegged coins, and we’ll focus on them too.
The Dollar Peg Is Showing Some Strain
Historically, stablecoins like Tether (USDT) and USD Coin (USDC) have been pegged to the US dollar to provide price stability and facilitate seamless transactions in the crypto space. However, recent controversies surrounding the dollar's stability and the rise of central bank digital currencies (CBDCs) have raised concerns about the long-term sustainability of this model.
For example, the Chinese government's development of the digital yuan poses a pronounced threat to the dollar's status as the global reserve currency — at least, in the digital sphere, as the Federal Reserve repeatedly denied any plans to go ahead with the introduction of the digital dollar. Additionally, the recent surge in interest in decentralized stablecoins like DAI, which are not tied to any fiat currency, signifies a growing demand for alternative benchmarks.
As a result, lately, stablecoin issuers and developers are getting more and more involved in alternative valuation mechanisms that are resilient to geopolitical uncertainties and market fluctuations. Whether it's anchoring stablecoins to a basket of commodities, cryptocurrencies, or a decentralized algorithm, the future of stablecoins hinges on their ability to innovate and adapt to what many call a post-dollar economy.
Acknowledging that crypto economies don’t trade in dollars, but in blockspace and energy, helps us admit that there’s something more than just any kind of purely experimental, try-and-fail initiative.
Bitcoin vs. the Dollar: The Asset Class No One Saw Coming
Bitcoin's historical appreciation against the USD is massive, with percentage gains reaching into the tens of thousands. While the percentage gains are not as high as in the early days, Bitcoin still shows substantial appreciation over time, with periods of rapid increases followed by corrections.
While certainly Bitcoin’s mind boggling historical rise would unlikely copy the corresponding inflation pattern, it gives us a strong sense of what is going to happen if or when the USD starts to be priced down to its real, stripped of borrowing and reserve currency factors, buying power.
When and if it’s going to happen is, certainly, anyone’s guess. However, the very existence of this new value stability benchmark, Bitcoin, poses a fascinating question of whether currency-linked stablecoins’ pegs justify their common perception of being stable.
So far, currency-pegged stablecoins remain very popular because of their ability to mimic the underlying currencies’ exchange rate dynamics. This is very useful for instant payment transactions — especially for commodities and goods whose prices are denominated in the corresponding currencies. However, few of us would argue that they are poorly designed to be stores of value.
Recently, Donald Trump signed his new “Big Beautiful Bill”, implying additional national borrowings to the tune of over 3.3 trillion dollars, which means the dollar's real buying power will be eroding even faster than before. This is why stablecoins need a new benchmark to stay relevant in a post-debt-driven economy.
Who Really Holds the Power in Web3.0?
As the discussion around stablecoins evolves, one of the unavoidable questions persists: what truly holds value in the crypto and the emerging Web3.0 ecosystems? The answer is multifaceted, but, in fact, very intuitive. One key aspect is utility and adoption: assets providing real-world utility within decentralized applications or smart contracts are slowly but surely gaining traction. Tokens facilitating transactions or governance within thriving ecosystems are often perceived as more valuable than those lacking their own ecosystem currency-pegged stablecoins.
Furthermore, community trust plays a vital role. Projects with strong, engaged communities, like Uniswap (UNI) or Compound (COMP), that emphasize community involvement tend to enjoy greater long-term stability. Additionally, innovative use cases such as NFTs in gaming or digital art are redefining value in the digital space. These tokens, recognized for their unique attributes, challenge traditional monetary definitions of value, highlighting the dynamic nature of the crypto, in general, and Web3.0, in particular, ecosystems.
