Can Stablecoins Save The US Dollar... Or Just Delay Its Collapse?

Tether is presented as the world's most profitable company per employee, generating over $83 million per worker. It functions as the largest stablecoin, USDt, offering global digital access to US dollars. This is particularly valuable in emerging markets where local currencies are unstable, acting as a digital alternative to traditional banking for billions. Stablecoins, including Tether, are now settling more value than Visa, indicating a shift in payment systems. Tether's operations are compared to the eurodollar market, which facilitates offshore US dollars outside of US regulatory oversight. While significantly smaller, Tether is rapidly growing and provides a digital, instant, and out-of-system access to offshore dollars for retail and smaller institutional players. The company profits by investing its reserves in short-term US Treasury securities, earning interest while users do not. Tether has become a major buyer of US Treasuries, partnering with Cantor Fitzgerald, a primary dealer with direct access to the Federal Reserve. This partnership ensures Tether can manage large-scale redemptions, as demonstrated during a past attempted bank run where Tether successfully redeemed billions. Tether is effectively channeling global demand for US dollars into US Treasuries, profiting immensely. Despite its role in supporting the US dollar and Treasury market, the author argues that Tether's impact on the US dollar's long-term trajectory of debasement is minimal. Unstoppable government spending is cited as the primary driver of currency devaluation. While Tether provides short-term stabilization, it doesn't fundamentally alter the US government's bleak financial outlook due to high expenditures. The article concludes by promoting a report on preparing for an economic crisis.