Key takeaways:
- A US court authorized Binance to transfer client cash into US Treasury Bills on July 19.
- Paul Ryan also mentioned the use of stablecoins to ease the debt issue and maintain the US dollar’s strength in international trade.
A US court authorized Binance to transfer client cash into US Treasury Bills on July 19.
Binance will be permitted to invest “certain” customer funds through a third-party investment manager following the order issued by the United States District Court for the District of Columbia, provided that Binance ensures the funds are not reinvested in the business or any of its affiliated companies.
The court decision also required Binance to include a breakdown of any charges related to maintaining the custodial US treasury investments in its monthly report on its business expenses and operations.
The court’s ruling, which permits Binance to invest client funds in US Treasury Bills, portends the potential role of cryptocurrencies in supporting the US dollar against the BRICS countries’ de-dollarization initiatives.
More precisely, collateralized stablecoins have been proposed to purchase and hold US debt instruments, potentially extending US dollar dominance by decades. This would help offset some of the massive inflation caused by years of quantitative easing, subpar monetary policy, and reckless fiscal policy.
One such instance is the stablecoin Tether. In 2023, Tether owned $72.5 billion in US Treasury bonds, which is comparable to the holdings of some developing nations. The company emphasizes that its dollar-pegged stablecoin is heavily collateralized as a precaution against a significant collapse.
Paul Ryan, a former speaker of the US House, also mentioned the use of stablecoins to ease the debt issue and maintain the US dollar’s strength in international trade.
Ryan emphasized how the value of the fiat-equivalent tokens is supported by the significant demand dollar-pegged stablecoins create for US debt securities and the US dollar.
Some, like the Human Rights Foundation’s chief strategy officer Alex Gladstein, think that decentralized digital currencies should have replaced the dysfunctional, fiat-centric system, and those dollar-pegged stablecoins simply serve to reinforce it.
According to reports, Binance and Megazone, a South Korean cloud service provider, are closing on an agreement for Binance to sell the majority of its shares in Gopax. Many rumors have surfaced regarding the company’s plans to reduce its stake in the South Korean exchange after it announced the acquisition in early 2023.
