Brian Armstrong Highlights Stablecoins' Role in Global Dollar Access

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Global Dollar Demand Drives Stablecoin Adoption

Stablecoins are emerging as a core use case for cryptocurrency beyond speculative trading, serving global demand for dollar access and low-cost cross-border payments.

According to industry leaders, access to financial services remains uneven worldwide, as most of the global population resides outside the United States and lacks access to dollar-denominated bank accounts. Stablecoins enable individuals with smartphones to hold digital representations of U.S. dollars and transfer value globally at low cost and near-instant speed.

Demand for dollars is strongest in regions facing high inflation or currency instability. For example, in countries experiencing 50-70% inflation rates, stablecoins enable users to store value in dollars without relying on traditional banking systems. Stablecoins function as one-to-one digital representations of fiat currency held in custody, allowing holders to move funds without the delays or fees associated with banks, remittance services, or card networks. Traditional remittance channels often charge between 5% and 12% per transaction, while stablecoin transfers can settle in seconds for less than one cent.

Geopolitical Competition in Digital Payments

Regulatory scrutiny of U.S. stablecoin reward restrictions has intensified following announcements about interest-bearing central bank digital currencies in other jurisdictions. Some argue that restrictions on stablecoin rewards could weaken the competitiveness of U.S.-based digital payment systems as global alternatives expand.

Offers of rewards on stablecoins do not necessarily reduce lending activity, but can influence consumer adoption rates. The impact of such incentives remains a subject of ongoing policy debate.

Research Challenges Banking Impact Claims

Recent research disputes claims that stablecoin rewards pose risks to traditional banking. Studies show no meaningful correlation between stablecoin usage and deposit outflows at community banks. A separate academic study found that stablecoin rewards would need to approach 6% annual rates to have measurable impact on bank deposits.

These findings suggest that concerns about stablecoin rewards may stem from competitive considerations rather than financial stability risks. Regulatory frameworks that clearly define conditions for stablecoin incentives could provide market clarity while maintaining appropriate oversight.