Ryan stated that the US debt, which currently stands at $35.46 trillion, threatens the US dollar’s status as the global reserve currency.

Arguing that stablecoins can delay the crisis by investing in US debt, Ryan thinks that growth in this area can benefit the US economy.

US dollar-backed stablecoins, such as USDT Tether and USD Coin (USDC), hold over $95 billion in reserves in US Treasury securities.

The growth of stablecoins has the potential to reduce US debt by increasing demand for US Treasury bonds while providing investors with access to the crypto market with fiat currency.

According to Tether’s report dated October 31, 2024, the stablecoin issuer holds $84.548 billion worth of US Treasury bonds. Circle’s report dated November 12 confirms the Treasury bill amount of $ 11.127 billion, based on BlackRock data.

According to Ryan, the potential of stablecoins to reduce US debt could preserve the dollar’s reserve currency status. However, an obstacle in this process is seen as the loss of the ability to impose sanctions with the integration of stablecoins into the traditional financial system.

Because stablecoins are traded on public and permissionless blockchains, they offer an approach that aligns with American values ​​— freedom and openness — but differs from China’s digital finance infrastructure.

China, the second largest buyer of US debt, has reduced its US Treasury bond assets, which reached $1.27 trillion in 2013, to below $1 trillion since April 2022. Experts state that geopolitical concerns and changing trade policies are behind this decrease.

Stablecoin issuers’ purchases of Treasuries reduce reliance on traditional debt buyers and ease concerns about declining debt amounts in the changing political climate following the U.S. election.

The report titled “Digital Currencies: At the Crossroads of the United States, China, and the World,” published by the Hoover Institution, highlights China’s pioneering position in digital currency and its impact on global financial standards.

The report argues that the United States should focus on regulating existing stablecoins and facilitating the transition to the digital economy, rather than creating a digital dollar.

It is stated that for this transition to be successful, coordination with G7 countries and other democratic partners is critical and setting standards that increase privacy, accountability, security and rule of law in the global digital financial system.

U.S. Senator Cynthia Lummis officially introduced the Bitcoin Act in July 2024, proposing the creation of a national Bitcoin reserve of 1 million BTC tokens to strengthen America’s balance sheet.

Lummis claims that by using this reserve, the USA can become a debt-free country within 20 years. However, given the current amount of debt and Bitcoin’s market cap, this scenario is unlikely to happen.

While the US national debt is $35.46 trillion, Bitcoin’s market value is $1.739 trillion. In order for 1 million Bitcoins to pay off the debt, each BTC must reach a value of $35.46 million, which is a very remote possibility.

Bitcoin reached $93,265 on November 13, boosting investor confidence and strengthening expectations of hitting $100,000 by the end of the year. It is predicted that Bitcoin, which gained 70% in value between September and November 13, may reach $150,000 with a similar increase. However, technical indicators indicate caution.

In particular, although the moving average convergence/divergence (MACD) on the weekly price chart gives positive signals, the relative strength index (RSI) at 72 indicates that BTC may be overvalued, and this is considered a possible correction signal.

How stablecoins and cryptocurrencies will be integrated into the US economy and what regulations will be applied in this process will continue to be one of the focal points of global financial markets in the coming period.