Dollar's Global Bond Dominance: Cycles, Stablecoins & Euro Challenge
Update: 2025-12-18
Description
The US dollars dominance in global bond markets has fluctuated over the past sixty years, with no clear long-term trend of growth or decline. Despite challenges, the dollar remains central due to the lack of strong alternatives. A new study from the Federal Reserve reveals three periods of increased dollar usage in international debt, with the most recent one following the 2008 financial crisis. The global stablecoin market, now valued at nearly $310 billion, is indirectly strengthening the dollars position as it holds US government debt. This development has raised concerns in Europe, with Italys Economy and Finance Minister warning that US policies could weaken the euros role. In response, a group of European banks plans to launch a euro-pegged stablecoin in 2026.
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