Bitcoin and the US dollar have a 'symbiotic' relationship: BPI exec

US dollar-pegged stablecoins and Bitcoin (BTC) stock a “symbiotic” relationship, mutually benefitting from rising adoption, according to Sam Lyman, caput of probe astatine Bitcoin Policy Institute (BPI), a Washington DC-based integer plus advocacy organization.

“Bitcoin is beneficial to the US strategy due to the fact that the largest Bitcoin trading brace is BTC/USD,” oregon Tether’s USDt (USDT) stablecoin, which is backed by currency deposits and short-term US authorities debt, Lyman told Cointelegraph. He added:

“There is simply a symbiotic narration betwixt BTC and the dollar strategy due to the fact that BTC is astir often traded successful dollars. So, I bash spot those things arsenic being mutually reinforcing, which runs contrary to the communicative astir BTC that it would really undermine the dollar.”

US dollar-based trading pairs predominate the BTC market. Source: CoinMarketCap

He said Bitcoin and dollar-pegged stablecoins stock a akin relationship to the dollar and oil. Under the petrodollar system, which began successful the aboriginal 1970s, planetary lipid income are priced successful dollars, driving much request for the currency.

Lyman urged US lawmakers to proceed processing stablecoin regulations introduced successful the GENIUS regulatory framework, without deviating from its halfway principles, to strengthen and support US dollar hegemony and stay competitory successful geopolitics.

Data from 2024 besides reflects the dominance of the dollar successful BTC markets. Source: Kaiko

Related: Stablecoins flip automated clearing location measurement successful February

China clamps down connected permissionless blockchain tech to propulsion for CBDC

The People’s Republic of China has “banned” Bitcoin and stablecoins respective times, due to the fact that some are a “tremendous threat” to the government’s superior controls, which are a captious constituent of the Chinese economy, Lyman told Cointelegraph.

“The full Chinese system depends connected superior controls. China is capable to support wealth wrong the state by preventing its elite from moving wealth retired of the country,” helium said.

This is wherefore China reaffirmed its stablecoin prohibition successful 2025, choosing alternatively to motorboat the integer yuan, a yield-bearing cardinal slope integer currency (CBDC) to power superior flows and seizure a larger information of the overseas currency speech market, Lyman said. 

CBDCs are afloat programmable and controlled by the authorities oregon the cardinal slope issuing the integer fiat currency.

However, the bans person failed to really curtail permissionless crypto activity, including Bitcoin mining and stablecoin flows to and from China, Lyman said.

Despite a broad prohibition connected Bitcoin mining, Chinese mining pools power much than 36% of the mining excavation planetary hashrate, oregon the full magnitude of computing powerfulness mining pools are contributing to unafraid the network, according to Hashrate Index.

Magazine: Bitcoin vs stablecoins showdown looms arsenic GENIUS Act nears