Trump’s USD1 stablecoin project is not driven by blockchain innovation but aims to expand the U.S. dollar’s global dominance.
The recent launch of USD1, a new dollar-pegged stablecoin backed by U.S. President Donald Trump and his family, has sparked significant interest in the crypto and finance sectors. However, Mateusz Kara, the CEO of Ari10, a European crypto payments giant, presents a compelling argument that the real motive behind this stablecoin may not be an endorsement of blockchain technology, as it appears on the surface. Rather, Kara suggests that it is part of a broader strategy to expand the reach of the U.S. dollar and reshape global debt markets.
Given his apparent backing of the cryptocurrency space, Trump’s USD1 stablecoin may appear to be another step towards the widespread use of cryptocurrencies. But according to Kara, the true goal is more monetary than technological. Kara questioned Trump’s apparent fervour for stablecoins and blockchain in a message to crypto.news. Rather, he views the endeavour as a calculated step to open up a fresh, open market for US assets.
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The idea behind stablecoins like USD1 is really simple: in order to support the value of the stablecoin, the platforms issuing them must buy US dollars. This creates an opportunity for the U.S. government to employ a crypto-based mechanism to indirectly promote the adoption of U.S. currency throughout the world. Kara contends that this would greatly increase demand for US dollars and, consequently, for US debt instruments, such as Treasury bonds.
Kara’s perspective reveals a significant change in how the United States may use blockchain technology—not as a decentralisation innovation, but as a means of bolstering the dollar’s position as the primary reserve currency of the globe. Accordingly, Trump’s backing of stablecoins might be more about boosting American economic clout internationally than it is about promoting blockchain technology or cryptocurrencies.
The USD1 was created as a calculated move to establish the dollar as the preferred stablecoin for international digital transactions. With Trump’s support, the U.S. government wants to stay ahead of the curve as cryptocurrencies and digital assets continue to make ripples in international finance by guaranteeing the U.S. dollar’s continued dominance in the changing financial landscape.
Although there are many potential uses for blockchain technology, such as decentralised governance and financial transparency, the U.S. government may find that using stablecoins like USD1 is more practical—financial engineering at its best. Instead of promoting blockchain for the sake of decentralisation, Trump and his allies are aiming to control and grow the market for U.S. dollars by developing a dollar-pegged stablecoin.
This USD1 stablecoin should be seen through the prism of financial strategy rather than technological innovation, even though it appears to be another significant step towards blockchain adoption. Such a decision might have far-reaching effects for the future of the US dollar in foreign markets as well as the adoption of cryptocurrencies worldwide.
