Tether Custodian CEO, Howard Lutnick, made a strong case for stablecoins explaining their importance in the cryptosphere and how they benefit the United States dollar.
According to Coindesk, Howard Lutnick commented on one of the longest-standing debates about stablecoins pegged to the price of the US dollar and whether they contribute to the global dominance of the US dollar.
He explained while speaking at the Chainalysis Conference on Wednesday that stablecoins as a matter of fact contribute to US dollar hegemony and global dominance and are also beneficial to the US economy.
- “Dollar hegemony is fundamental to the United States of America. “It matters to us, to our economy. That’s why I’m a fan of properly backed stablecoins, Tether and Circle.”
- Stablecoins are “fundamental for the U.S. economy, driving demand for U.S. Treasury notes, and do not pose a systemic risk to the world,” Howard Lutnick explained.
The Dollar’s superior exploit in the global economy allows the United States to run large deficits, borrow at cheaper rates, and impose sanctions on adversaries.
Crypto traders widely use stablecoins as funding currencies in the spot market and as collateral in derivatives trading.
Investor confidence in the stablecoin market took a hit when Terra’s algorithmic stablecoin, UST, collapsed in May 2022.
Tether (USDT) and Circle (USDC) have however passed the stress test and have proven to be well-backed and formidable stablecoins over the years.
Howard Lutnick is the CEO of Cantor Fitzgerald a custodian for Tether Holdings the issuer of the world’s largest stablecoin, tether (USDT).
Recommended reading: Nigerian banks, fintechs set to launch cNGN stablecoin on February 27
What To Know
- Stablecoins are cryptocurrencies that peg their market value to a commodity or currency. The two most popular stablecoins in the Crypto industry peg their market value to the US Dollar. They are Tether (USDT) and Circle ( USDC)
- Tether (USDT) boasts of a market cap of $107 billion, while second-ranked Circle’s USDC had a market value of $32.25 billion.
- Stablecoins serve as a stable alternative to other cryptocurrencies which are usually highly volatile and risky to trade with.
