Fireblocks says global demand for non-dollar stablecoins grows

Governments outside the United States are increasingly exploring stablecoins not pegged to the US dollar, according to Dea Markova, director of policy at Fireblocks.  

Markova explained that while non-dollar stablecoins have limited liquidity at the moment, the push for alternatives to dollar-pegged stablecoins is driven by concerns over sovereignty.  

She likened the growing competition with dollar-backed stablecoins to past tensions between governments and US payment companies like Visa and Mastercard.  

"Now we’re seeing the same dynamic with stablecoins — on a smaller scale for now — but they’re definitely emerging as a new arena for sovereign concerns," Markova said during an interview at Token2049.  

Markova highlighted the challenges faced by dollar-pegged stablecoins in the European Union, where they are encountering resistance from central banks despite being compliant and regulated.  

"The European Central Bank is increasing pressure to accelerate the development of a digital euro," she said, citing concerns over the systemic risks posed by dollar-linked stablecoins within the eurozone.  

The dominance of dollar-pegged stablecoins is evident in the market, with Tether’s USDT (CRYPTO:USDT) and Circle’s USDC (CRYPTO:USDC) combining for $210.9 billion, or 87.2% of the total stablecoin market capitalisation of $241.8 billion, according to DefiLlama.  

Markova also pointed to the United Arab Emirates as being ahead in regulatory thinking on stablecoins.  

She praised Abu Dhabi’s approach, which does not require stablecoin issuers to be domiciled or licensed locally.  

Instead, the emirate conducts due diligence on global stablecoins and decides whether local exchanges can offer them.  

Abu Dhabi has already approved USDT and USDC as recognised virtual assets, and institutions in the emirate are collaborating on the launch of a dirham-pegged stablecoin.