You would think after being wrong for more than 60 years, people would start to evaluate what they believe.
When it comes to the US dollar, this is not the case.
Throughout my entire life I have heard how we are heading for the end of the dollar. A number of decades ago, the anti-US publication, The Economist, opined that the world needed a currency that was managed by a global central bank and outside the influence of any single government.
It was called the "Phoenix". Needless to say, this never took off.
Back in the late 1990s, the narrative around the euro was that it would, at a minimum, rival the USD. While it did attain a certain level of reserve status, moving into the #2 position, it never got close to the dollar. Today, the euro is nothing more than a regional currency.
It had its own crisis, showing that it is not immune to at-home political pressures, something The Economist said befell the US dollar.
In the age of crypto, we have more calls for the end of the dollar. People who make investment decisions based upon this false narrative not only are misled, they are going to lose their money. There is a reason why most people end up on the wrong sides of trades.
A majority of the Bitcoin maxis are even backing off on the idea of Bitcoin replacing the US dollar. It was a foolish concept from the start. Bitcoin was never going to be electronic currency in the sense it operated as a medium of exchange. Hence, the idea people were going to use it to purchase goods and services was naive.
For those who understand the effects of the dollar, it is no surprise that the "killer use case" for crypto are stablecoins. We are already seeing the impact as they are being positioned to take over the global payment system.
My guess is that, by the end of 2026, we see the momentum in full swing. Major banks are likely to enter the market throughout the year, shifting hundreds of billions in deposits to tokens. The infrastructure is being constructed, something that will accelerate the process.
All of this feeds into the power of the dollar. Instead of getting weaker as many claim, it is gaining in strength. Do not look at this from a pricing perspective. Instead, the focus should be on the utility.
The dollar is already the currency of international trade, finance, and central bank reserves. With the new system, it is already lining up to be the currency of tokenization.
Stablecoins totals are now at $312 billion (according to Coingecko). US dollar denominated totals are at $304 billion.
Its dominance is only growing.
The dollar has network effects that are unrivaled. While it is likely this percentage does diminish a bit, when we look at a greater than 90% market share, we are talking about Google search.
In the digital world, we operate from a winner take most perspective. There is no way to deny this. We have 30 years of history with everything from social media to ecommerce which proves out this point.
Network effects simply cannot be overlooked. As they are gained, it is very difficult to reverse.
The US dollar has this.
Currency is no longer physical. The overwhelming percentage of transactions are done via digital networks. Crypto transactions are 100% digital since there is no physical equivalent. This means we are looking at all stablecoin transaction coming under this "effect".
Another factor that is just getting started is the idea of real world assets (RWA). What are these going to be priced in? This is another benefit the USD enjoys. US Treasures (T-bills) are the most liquid assets. For this reason, the dollar is the choice because companies can swap into bills for short-term holds. When the currency is needed, an easy swap back is undertaken.
Stablecoins denominated in dollars will do the same. As more RWA emerge that are priced in dollars, consider the leverage it gives the tokens. No longer are we dealing with national borders. At the same time, due to the impotency of The Fed, monetary policy has little impact.
For 60 years people have professed the death of the dollar yet it is only garner more market share. What happens when we are $3T-$4T in stablecoins, most USD denominated?
We can see what will rule the roost.
