The CoinSpeech team has collected the most important insights from Anthony Pompliano’s recent appearance. Below are the key highlights and interesting perspectives shared by Pompliano. You can find Anthony Pompliano’s new video embedded at the end of this article.
Stablecoins and the US Debt Crisis
Pompliano dives into the US debt crisis, highlighting that the national debt has surged to over $34 trillion and continues to escalate at an alarming rate. He says, “It’s not just that the number is getting bigger but it’s actually getting bigger at a faster rate.” With traditional buyers like China and Japan reducing their debt acquisition from 22% to 7%, the question arises: Who will buy this debt?
The Rise of Stablecoin Issuers
The answer may lie in stablecoin issuers. According to Pompliano, stablecoin entities like Tether and Circle have become significant buyers of US treasuries. He elaborates, “Collectively, all of the stablecoin issuers today now own… somewhere between the 15th and the 16th largest holder of US treasuries.” These entities are rate-insensitive, providing a more reliable new demand for treasuries, unlike institutional investors who are highly rate-sensitive.
The Financial Asset Component
Pompliano’s vision isn’t just about solving debt issues; he also focuses on the broader adoption of the dollar through digital formats. “The more that we can get people around the world who want dollars to have dollars in their hand, that is good for the US.” According to him, stablecoin issuers have filled the void and are facilitating global accessibility to the dollar, driving demand and consequently strengthening the US currency.
Central Bank Digital Currencies: Friend or Foe?
Pompliano draws a clear line between stablecoins and central bank digital currencies (CBDCs). He notes that CBDCs present significant concerns, primarily around surveillance and personalized monetary policies. “The worry with Central Bank digital currencies… is they can just see the whole Ledger.” Personalized monetary policy could lead to unequal inflation rates, influenced not by economic behavior but potentially by political biases.
The Propaganda Around Dollar’s Deterioration
The narrative of the dollar’s decline is often exaggerated, according to Pompliano. He cites, “Today, 58 to 59% of all bilateral trade in the world is settled in dollars,” indicating not only stability but an increasing reliance on the US dollar in global trade.
A Balancing Act for Future Stability
While the private sector has effectively advanced in stablecoin issuance, Pompliano expresses cautious optimism about the US government’s potential involvement. He suggests the government should carefully consider if or how they might step in, given concerns around surveillance and economic control. Ultimately, the best solution for the debt crisis may involve a combination of strategic adoption of digital assets and prudent fiscal policies.