Your FT Weekend Essay “How low can the dollar go?” (March 22) overlooks a key element of the US administration’s official strategy to maintain dollar dominance: the use of stablecoins as a tool of monetary and geopolitical policy.
As Christopher Waller, a Federal Reserve governor, explained in a speech in February, stablecoins make it possible for people around the world to hold and use US dollars on public blockchains — without needing a bank account. Scott Bessent, the Treasury secretary, took this further at the White House crypto summit on March 7, saying the US will use stablecoins to help preserve the dollar’s role as the world’s reserve currency and in driving net new demand for US Treasury bills.
A new bill supported by the administration proposes that licensed dollar stablecoins be backed by US Treasury bills and cash, strengthening global demand for US debt and reinforcing the dollar’s position.
This marks a turning point in how currency power is maintained. In 1944, world leaders met in Bretton Woods to rebuild the global financial system around the dollar. Today, a new version of Bretton Woods is taking shape — not in mountain resorts, but in GitHub repositories and blockchain technology, supported by forward-looking legislation.
Jón Helgi Egilsson
Former Chair, Supervisory Board, Central Bank of Iceland; Co-founder, Monerium, Edinburgh, UK
