As BRICS welcomes new members and strengthens its dedollarization agenda, a burning question emerges: could the stablecoin Tether (USDT) be the United States' secret weapon to preserve its economic hegemony? The implications for the crypto market and the global economy are immense.
BRICS dedollarization efforts
The BRICS group, made up of Brazil, Russia, India, China and South Africa, recently invited Iran to join its ranks. This expansion underscores the growing ambition of these nations to challenge the economic supremacy of the U.S. dollar. Tether CEO Paolo Ardoino recently highlighted the importance of Tether (USDT) in this context. He stated that USDT “ brings the US dollar to hundreds of millions of people around the world living in developing countries who need an alternative to their local currencies“. This statement highlights the potential of USDT to serve as a substitute for the dollar in fragile economies.
BRICS member countries have long considered alternatives to the dollar for cross-border transactions. They announced the creation of an independent payment system based on digital currencies and blockchain. Furthermore, they are still examining the possibility of implementing a stablecoin to facilitate these transactions. Russian President Vladimir Putin even hinted that the bloc could explore using XRP combined with Ripple for cross-border settlements.
The potential role of USDT
Howard Lutnick, CEO of Cantor Fitzgerald, recently highlighted the vital importance of a dollar-backed stablecoin for the United States, in the face of BRICS dedollarization efforts. According to him, ” the digital dollar is more important than ever“. Although he did not explicitly mention which stablecoin the United States should adopt, his comments suggest a preference for USDT.
Lutnick's subtle support for USDT can be seen as a strategy to promote the capabilities of this digital currency and thus strengthen the position of the US dollar in the face of BRICS dedollarization initiatives. By providing a stable and widely accepted alternative, USDT could help maintain the dollar's influence amid increased competition. However, the implications of this approach are manifold and must be carefully considered. The legitimacy and stability of Tether's reserves are crucial to ensuring user and investor confidence.
The future outlook shows that the United States will need to adapt and innovate to maintain its monetary supremacy. The growing adoption of stablecoins like USDT in international transactions could play a key role in this strategy.
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