Stablecoins have been hailed as beneficial to the U.S. economy by Howard Lutnick, CEO of Cantor Fitzgerald, the custodian of Tether. Lutnick believes that stablecoins, such as Tether (USDT) and Circle (USDC), drive demand for U.S. Treasury notes and do not pose a systemic risk to the global economy. He emphasizes the importance of dollar hegemony to the United States and sees properly backed stablecoins as fundamental for the country’s economy.
Stablecoins, which are cryptocurrencies pegged to a fiat currency, are widely used by crypto traders as funding currencies and collateral in trading. These digital assets also provide a safe haven during challenging financial periods, as demonstrated during the 2022 Federal Reserve tightening cycle.
While Lutnick supports stablecoins, he expresses skepticism towards central bank digital currencies (CBDCs). He raises concerns that a potential digital dollar may be viewed by China as an “American spy wallet,” potentially creating geopolitical tensions.
Looking ahead, Lutnick believes that blockchain technology will enable the tokenization and trading of real-world assets such as bonds. He predicts this transition to occur within the next decade as the technology becomes faster and more cost-effective.