According to Sam Lyman, head of research at the Bitcoin Policy Institute (BPI), a Washington-based digital asset advocacy organization, U.S. dollar-pegged stablecoins and Bitcoin (BTC) have a “symbiotic” relationship, mutually benefiting from growing adoption.
“Bitcoin is beneficial to the U.S. system because the largest Bitcoin trading pair is BTC/USD,” or the USDt stablecoin Tether (USDT), which is backed by U.S. government cash deposits and short-term debt, Lyman told Cointelegraph. Added:
“There is a symbiosis between BTC and the dollar system because BTC is most often traded in dollars. So I think these things reinforce each other, which goes against the narrative around BTC that it would actually weaken the dollar.”
Bitcoin and dollar-pegged stablecoins have a similar relationship with the dollar and crude oil, he said. Under the petrodollar system, which began in the early 1970s, international oil sales are priced in dollars, driving greater demand for the currency.
Lyman urged U.S. lawmakers to continue working on the stablecoin regulations introduced in the GENIUS regulatory framework, without deviating from its core principles, to strengthen and protect the hegemony of the U.S. dollar and remain competitive in geopolitics.
Related: Stablecoins reverse automated clearinghouse volume in February
China restricts permissionless blockchain technology to push for CBDC
The People’s Republic of China has “banned” Bitcoin and stablecoins several times because both pose a “tremendous threat” to government capital controls, which are a key element of China’s economy, Lyman told Cointelegraph.
“The entire Chinese economy is based on capital controls. China is able to keep money in the country, preventing its elite from moving money out of the country,” he said.
China has therefore reaffirmed its ban on stablecoin sales in 2025, opting instead to launch a digital yuan, a profitable central bank digital currency (CBDC) that is expected to control capital flows and capture a larger share of the foreign exchange market, Lyman said.
CBDCs are fully programmable and controlled by the government or central bank issuing the digital fiat currency.
However, the bans have not actually curbed illegal crypto activity, including Bitcoin mining and stablecoin flows to and from China, Lyman said.
Despite a complete ban on Bitcoin mining, Chinese mining groups control over 36% of the global hashrate of this mining pool, i.e. the total number of computing power mines contributes to securing the network, According to to the hashrate index.
Warehouse: The Bitcoin vs stablecoins showdown looms as the GENIUS Act approaches
