Paul Ryan backs stablecoins to fight US debt crisis

Former House Speaker Paul Ryan has suggested that stablecoins could be key to mitigating the looming US debt crisis.

In an opinion piece, Ryan addressed the growing importance of dollar-backed stablecoins, which use US Treasuries as backing, to maintain demand for US debt and offset the growing international influence of the Chinese yuan.

Ryan highlighted the potential of stablecoins to address the growing US debt, which currently exceeds $34 billion. He warned that failure to manage budget spending could jeopardize the American financial system. A failed Treasury auction, he argued, would trigger severe budget cuts and undermine confidence in the U.S. dollar.

According to Ryan, stablecoins could provide a new source of demand for US Treasuries. Unlike traditional state-backed debt holders, stablecoins are used by institutions and individuals in economically weaker regions. This broader demand base could stabilize U.S. debt markets and maintain the dollar’s status as a global reserve currency.

Countering Chinese influence in global markets

Ryan also highlighted the role stablecoins could play in countering China’s growing influence on global financial markets. As nations like Saudi Arabia and China reduce their US Treasury reserves and explore non-dollar payment systems, stablecoins could serve as a tool to strengthen the dollar’s dominance.

Ryan noted that stablecoins, particularly those operating on public blockchains, would bring with them “deeply American values ​​of freedom and openness.” The promotion of dollar-backed stablecoins could offer a solid alternative to the Chinese yuan, particularly in emerging markets where China is expanding its influence through investments and infrastructure projects.

Support from industry leaders

Ryan’s views are in line with statements from major players in the stablecoin market. Tether, the issuer of USDT, the largest stablecoin by market capitalization, has already addressed the potential of stablecoins to support financial stability.

In a September relationship Titled “Tether USDT and US Treasury Dynamics,” the company highlighted that the decline in foreign purchases of Treasury securities could be offset by stablecoins, thus supporting both US and global financial stability.

Ryan’s call for serious consideration of stablecoins highlights the need for innovative solutions to the complex challenges of the US economy. By capitalizing on demand for dollar-backed stablecoins, Ryan believes the US can reduce the risk of a failed debt auction and avoid a potential fiscal crisis.

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