Global demand for US dollars surges, Ethereum is expected to become the digital dollar economic infrastructure

Despite calls from some countries for "de-dollarization", the global demand for the US dollar is exploding. More than 4 billion people and millions of businesses are actively acquiring dollars through stablecoins, representing the largest expansion of the dollar's network effect in decades.

This has created unprecedented opportunities for Ethereum. Since 2020, the dollar channels provided by stablecoins to individuals globally have grown 60 times, exceeding $200 billion. These new dollar holders not only need digital cash but also require yields, investment opportunities, and financial services. Due to regulatory and infrastructure limitations, traditional finance cannot serve this vast new market.

Ethereum has unique advantages that can provide a global financial infrastructure for this new digital dollar economy, and Ether will directly benefit from this growth.

The Huge Potential Demand for the US Dollar Globally

People around the world hope to use the US dollar for security.

• More than 4 billion people face significant currency risks due to political instability, poor monetary policies, and structural inflation.
• It is estimated that 21% of the global population lives in countries with an annual inflation rate exceeding 6%, rapidly eroding savings and purchasing power.
• For these people, holding US dollars means financial security. The dollar is seen as a store of value, a tool for cross-border transactions, and a means to hedge against fluctuations in local currency.

Companies need US dollars to conduct transactions:

• The US dollar remains the dominant currency in global trade, with 88% of foreign exchange transactions involving the dollar on at least one side.
• Emerging market enterprises rely on US dollar liquidity for international payments, imports, and supply chains, while local banks and foreign exchange markets in these markets are often limited or unstable.
• Small and medium-sized enterprises and freelancers increasingly need digital dollars to receive payments and avoid currency mismatch risks.

For the first time in history, anyone in the world can hold US dollars through stablecoins:

• Anyone with internet access can hold and trade dollars - no bank, no government permission, available globally 24/7.
• Therefore, since 2020, the market capitalization of stablecoins has increased by 60 times.
• Focus on emerging markets that were previously excluded from dollar-denominated finance. Nigeria has become the second largest cryptocurrency market in the world, while China remains under a ban, with underground cryptocurrency applications continuing.

Stablecoins are creating a new class of dollar holders among the world's largest population groups—businesses pricing in USDT and households saving in USDC. They are driving a fundamental expansion of the dollar financial services market.

New dollar holders seek returns, creating opportunities for global financial infrastructure

Stablecoin holders want their money to work.

Today, millions of people can hold US dollars through stablecoins. But their aspirations go far beyond this. Individuals and businesses naturally wish to use their funds for earning returns, investments, and wealth growth.

Traditional finance cannot serve this new market:

• The U.S. banking system requires compliance with regulatory requirements, excluding most global participants.
• Cross-border financial services are still expensive, slow, and geographically limited.
• Traditional finance is built for institutions and high-net-worth individuals rather than for global retail.
• Geographic and regulatory barriers hindered billions of dollars from participating in USD-denominated financing.

This has created a demand for new financial infrastructure that can serve billions of stablecoin holders worldwide, enabling them to utilize new dollars.

Ethereum Meets Three Major Requirements for Global Stablecoin Holders

The new financial infrastructure designed to serve stablecoin holders must meet three key requirements:

• Globally available - must be applicable anywhere there is internet access, from New York to Nigeria to rural Nepal. Due to geographical or regulatory reasons, most parts of the world cannot access dollar-based financing.
• Security for institutions - It is essential to provide the security, reliability, regulatory clarity, and customizability needed for institutions to build financial products worth billions of dollars.
• Resist government intervention - must not be under the control of any single government, as many governments prefer to restrict the circulation of the dollar to protect local currencies and control capital flows.

Ethereum meets all three requirements:

Globally Accessible: Anyone with an internet connection can use Ethereum 24/7.

Institutional Security:

• Security - Among all programmable blockchains, it has the highest economic security and degree of decentralization. The most mature security infrastructure - with the most open-source developers, verified contracts, security auditors, and tools.
• Reliable - whether in a market crash or geopolitical events, it can maintain 100% uptime for 10 years.
• Compliant with regulatory requirements - US regulators classify ETH as a commodity, thus providing a clear institutional framework.
• Customizable - The Ethereum L1+L2 framework achieves customizability, allowing institutions to optimize for specific use cases and meet regulatory requirements.
• Outstanding performance record - Home to the world's largest digital financial economy: a stablecoin with a market capitalization of over $140 billion, decentralized finance ( DeFi ) protocol investments exceeding $60 billion, and tokenization of real-world assets valued at over $7 billion.

Resisting government intervention: The government cannot occupy a single control point to control or restrict the network.

Ethereum uniquely meets these requirements with its powerful decentralized characteristics - its origin story is almost impossible to replicate today.

• The powerful decentralization makes Ethereum accessible, secure, and reliable globally, and able to withstand government interference.
• This level of decentralization is rooted in the origins and culture of Ethereum.
• Ethereum was originally a blockchain funded by the community and adopted a proof-of-work mechanism, which made its asset ownership very extensive. However, the current environment makes it no longer suitable to start in this way.
• Its culture has always prioritized decentralization—maintaining an expensive diversity of clients and resisting centralized shortcuts—making this culture nearly impossible to transform.
• As a result, Ethereum has a decentralized advantage that other chains cannot easily replicate, providing Ethereum with a lasting moat.
• Over 1 million validators are spread across more than 100 countries
• Multiple independent development teams ensure resilience and the largest open-source developer ecosystem
• Due to the community-funded initiation and the origin of proof of work, asset ownership is widespread.

No other alternatives can meet all three requirements at the same time.

ETH is expected to become the reserve asset of the new digital dollar economy.

What is a reserve asset?

In any financial system, reserve assets are the trusted foundational layer that supports everything. They are the collateral, savings, or liquidity assets held by institutions, protocols, and users, used for value storage, loan guarantees, and transaction settlements.

In traditional systems, the US dollar, US Treasury bonds, and gold are examples of reserve assets because they are trustworthy, highly liquid, and widely accepted.

Why did ETH naturally play this role?

As billions of dollars flow through stablecoins on Ethereum, participants need a secure, permissionless, and efficient asset to support lending, staking, and yield generation. ETH has a unique advantage in this regard because:

• Scarce and trustworthy: The supply of ETH is predictable, with a low inflation rate and not under central control.
• Productive: Unlike gold or static US dollars, ETH generates returns through staking—similar to the income generated from holding real estate or government bonds.
• Collateral Utility: ETH is already the largest on-chain collateral asset in the Ethereum ecosystem, supporting lending protocols worth $19 billion. Institutions hold it because they need it to enter the DeFi market.
• Anti-seizure and anti-censorship: Ether will not be frozen or seized by the government, making it more resilient than centrally issued assets.
• Programmable and highly liquid: ETH is deeply integrated into the entire on-chain financial system, offering unparalleled liquidity for large transactions.

Why does this make ETH valuable?

As more and more users hold stablecoins and require financial services, they need a reserve asset to support these activities. ETH can earn yields, secure the network, and support DeFi lending—therefore, as the system develops, the demand for ETH will naturally increase.

In simple terms: more adoption of stablecoins → more on-chain activities → more demand for ETH as collateral → institutions and users holding more ETH.

L2s have expanded the demand for Ether.

The growth of Ethereum Layer-2 further stimulates the demand for ETH. By reducing transaction costs, accelerating transaction speeds, and enabling new use cases, Layer-2 opens up more areas for ETH to be used as collateral. This expands the reach of ETH and strengthens its position as a reserve asset in the digital dollar economy.

ETH is expected to become a global store of value

The increasing demand for Ether has also allowed it to occupy a large share of the traditional value storage market.

• Like Bitcoin, Ethereum has superior store of value characteristics compared to traditional assets like gold (SoV).
• ETH and BTC will not compete with each other, but may share a piece of the $5 trillion traditional SoV assets ( gold, government bonds, stocks, and real estate ) in the coming years.
• In addition to having the SoV properties of Bitcoin, ETH also provides returns to its holders.
• Income generation is a major benefit, as investors generally favor income-generating assets. American households hold about $32 trillion in dividend-paying stocks, while the value of the gold they hold is less than $1 trillion.

ETH has characteristics that surpass traditional SoV assets and can provide returns.

Conclusion: Holding ETH may be the best way to participate in the growing stablecoin economy.

The growth of the stablecoin economy has created a strong flywheel for Ethereum and ETH.

As more and more stablecoins are put into use on Ethereum, the demand for ETH has also increased. The higher value of ETH and the more secure network have attracted more institutions and services, further driving the popularity of stablecoins.

The alternatives face significant challenges in replicating this flywheel:

• Traditional finance cannot serve the billions of people excluded due to geographical and regulatory barriers.
• Government-controlled systems are still subject to political influence and jurisdictional limitations.
• Bitcoin lacks the programmability of complex financial services.
• Other blockchains lack the security, reliability, and customizability required by institutions, and also lack the decentralization to resist government intervention.

The result is: Holding Ether may be the simplest and most effective way to access the rapidly growing stablecoin economy.

• You can also choose to invest in specific DeFi protocols that benefit from the expansion of stablecoins. However, this carries higher risks and requires expertise.
• For most retail and institutional participants, ETH provides the simplest access to the entire digital dollar ecosystem.

![Why is holding ETH the best way to participate in the stablecoin wave?](