No. Stablecoins only exist because fiat <-> crypto trading is a massive pain. Nobody wants to own stablecoins, they want easier transactions. And if the USD becomes less popular, people will switch to, for example, EUR stablecoins - there's nothing special about the dollar here.

On top of that, transaction volume is meaningless. Those $27.6T could be $27.6T held in escrow being traded once, or $1 held in escrow being traded 26.6 trillion times. You can't derive USD demand from transaction volume.

You can certainly estimate the amound of USD held as StableCoin Collateral:

"The total market capitalization of USD-pegged stablecoins exceeds $220 billion, with over 99% backed by fiat currencies, predominantly the U.S. dollar." https://chatgpt.com/share/681e95fe-4308-8008-ab25-61be94a418...

RE: Nobody wants to own stablecoins, they want easier transactions. Agree but that does not mean anything. Stablecoins seem to be solving a problem, and there is not evidence of any traction by any currency other than USD.

So this phenomenon definitely runs counter to the conventional intellectual wisdom that USD is in decline.

I thought tax evasion was the use case for stablecoins.

Tax evasion could certainly be a use case until govt's sort out the implications. But the lasting use case I think is - fast and cheap transfer of money, anywhere.

Disclaimer: I have never used stablecoins myself.

Only if the other major world currencies take active (and successful) steps against stablecoins being backed by them.

If they don't, stablecoins would presumably make it even easier to convert holdings into stablecoins backed by another currency (as there is no new account to be opened etc.) as soon as the sentiment on a given world currency shifts.

According to your argument and the article of this post, there should already be prominent stablecoins backed by other currencies. Yet there is not such thing AFAIK. Reason is simple. USD is the common denominator for people the world over. Almost everyone know what a dollar is, and that is reflected in the dominance of USDT and USDC. And since this is a relatively recent phenomenon, it goes counter to the narrative of the decline of the US Dollar.

> USD is the common denominator for people the world over.

Yes, currently. This article is about a hypothetical in which this stops being the case. My argument is that stablecoins would not stop such a trend, and could possibly accelerate it.

I understand the hypothetical trend being mentioned, and I would even agree with it in absence of stablecoins. See, today, if China & Russia want to trade, they may trade in Ruble or Yuan. Ruble or Yuan don't have to be universally accepted for them to trade. But if I am transacting in stablecoin, I don't want to use anything that is not universally accepted from the get-go. Otherwise, I might as well use Ruble or Yuan. So, even if in theory the stablecoin could be backed by any currency, I am not going to use just any stablecoin, only the one most widely accepted.

In other words, I think Stablecoin is winner-take-all, and USD has already won.

> I am not going to use just any stablecoin, only the one most widely accepted.

But why?

Due to the existence of decentralized exchanges, all stablecoins are effectively equally widely accepted. Some blockchains even make it fully transparent by handling foreign exchange in the background for every payment where it's required, and for the ones that don't, most common wallets provide a "swap" feature directly in their UI.

Given that, why would people not hold the one that preserves their purchasing power best and that they have most trust in?

RE: why would people not hold the one that preserves their purchasing power best and that they have most trust in?

That is exactly what they are doing right now - USD.

But for arguments sake, what is the emerging alternative?