Stablecoins Amplify Dollar Dominance

The cryptocurrency market has seen significant growth in recent years, but its development paths have been asymmetrical. In China, the central bank is driving the construction of the digital RMB system, while in the US, private dollar stablecoins such as USDT and USDC are gaining traction.

As of April 2026, the total market capitalization of global stablecoins is approximately $315 billion, with about 98% denominated in U.S. dollars. This data suggests that the blockchain era has not led to 'dollarization' but instead created a new channel for the US dollar to enter the internet economy.

The dominance of the US dollar can be attributed to its significant network effects, which are being amplified by digital technology. The BIS estimates that the US dollar accounts for 57.13% of global allocated official foreign exchange reserves, while the renminbi accounts for only 1.99%. In foreign exchange trading, the US dollar appears on one side of 89.2% of trades.

Stablecoins are not creating a new dominant currency but rather amplifying the existing network effects of the US dollar. They operate 24/7 and can automate settlement with on-chain financial assets, reducing friction in the operation of the dollar system. Major financial institutions are now embracing tokenization, including tokenized bank deposits, central bank reserves, and government bonds.

The true revolution is a 'tokenization revolution of financial assets,' where stablecoins coexist with bank deposit tokens, central bank money, and tokenized financial assets. The global on-chain stablecoin transaction volume reached approximately $35 trillion in 2025, but only about $390 billion represents payment-related flows.