Forget BRICcoin and GoldBRICs, Greenbacks Rule

Dateline: Las Vegas, 30th October 2024.A Russian plan to break the grip of the U.S. dollar through a new international payments network met a cool reception at the BRICS summit in Kazan a few days ago. Despite all of the excitable talk of new reserve currencies and gold-backed BRICSbucks, the greenback’s position is actually strengthening because of an entirely different monetary innovation: dollar-backed stablecoins.ShareDollar Dollar BillsThe news that in Turkey some 4% of GDP is already going on buying stablecoins is certainly surprising but it is not — at least to people who read my book The Currency Cold War — shocking. The Turkish Lira (TRY) is in fact the fourth most used fiat currency in the cryptocurrency world, as stablecoins and “meme coins” have surpassed even Bitcoin in the country. Right now, USDT-TRY (ie, Tether) is the largest trading pair by volume on Binance, reaching over $22 billion, more than five times greater than the next largest pair which is (astonishingly) PEPE-USDT, which has $4 billion.It is misleading to refer as some people do to this trend as being about cryptocurrency adoption, since it has always seemed to me to be the case that cryptocurrency demand in developing nations is largely a proxy demand for dollars anyway. What might this mean for a country such as Turkey?In that book I talked about the difference between “prime” currencies (eg, the US Dollar) and “permeated” currencies. Permeated currencies exist and are used in general circulation but are supplanted by other currencies for transactions that matter. I can illustrate the…Forget BRICcoin and GoldBRICs, Greenbacks Rule