Economist Peter Schiff expressed doubts that dollar-pegged stablecoins can support U.S. Treasury demand, pointing to rising inflation and deficits.
Criticism of Stablecoins
According to Peter Schiff, stablecoins do not aid in increasing the demand for U.S. Treasuries, despite their dollar pegging. He warns that such non-interest-bearing assets are more suited for trading in the crypto sector rather than for mainstream finance. "Investors looking for a hedge won’t settle for a token that pays nothing while purchasing power erodes," said Schiff.
Market Reaction
Immediate reactions to Schiff's statements indicate possible implications for U.S. Treasury policy and stablecoin markets. His perspective suggests that investors may look towards alternatives, such as gold-backed tokens, if USDT and USDC fail to provide yield amidst inflation challenges.
Regulatory Prospects
There remains a divide among governmental and economic stakeholders. Schiff expresses skepticism towards fiat-backed digital assets as reliable long-term hedges, while others like Scott Bessent forecast stablecoins as catalysts for increasing Treasury demand. Potential regulatory changes, such as the GENIUS Stablecoin Law, could impact adoption rates for stablecoins.
Peter Schiff's remarks on stablecoins highlight the need for further analysis of their role in the financial system, especially in light of current economic challenges.
