New York Attorney General Letitia James has warned that Bitcoin could threaten the dominance of the US Dollar and American interests. In a letter to Congress, she emphasized the need to defend the dollar’s position in global transactions, which Bitcoin’s ability to transfer value instantly threatens. To counter this, James urged Congress to consider onshoring stablecoin issuers backed by US Treasury bills and cash equivalents, ensuring they are supervised under federal laws. Offshore stablecoin issuers pose risks to the US Treasury market and banking system due to potential falsification of financial health records. Regulators must ensure redemption requests do not destabilize banks by enforcing diversification of institutions holding stablecoin deposits and increasing capital requirements. Some analysts believe Bitcoin’s dominance over the dollar is inevitable, citing concerns about US debt. Jeff Park of Bitwise Alpha Strategies noted that ongoing tariff wars could enhance Bitcoin’s position. Conversely, others view the push for US-domiciled stablecoins as beneficial for products like RLUSD. Stablecoins, backed 1:1 by reserve assets like the US Dollar or gold, could strengthen the dollar’s global dominance. The market is expected to grow significantly by 2028, prompting the US House and Senate to advance stablecoin bills for regulatory clarity. — new from AMBCrypto
