Stablecoins are the single best tool for the United States government to maintain the US dollar’s hegemony in global financial markets, according to LayerZero Labs CEO and founder Bryan Pellegrino.

In an interview with Cointelegraph, the CEO of LayerZero Labs, which created the LayerZero interoperability protocol recently chosen by Wyoming to be the distribution partner for the Wyoming stablecoin, said that the cross-border accessibility of dollar-pegged tokens makes them an obvious choice to drive US dollar demand. Pellegrino added:

“Stablecoins for the US dollar are the single best tool — the last Trojan Horse or vampire attack on every single other currency in the world — whether it is Argentina, whether it is Venezuela, whether it is all of the countries that have massive inflation.”

The CEO said he expects support for stablecoins on both the federal and state levels to grow because of the obvious boost stablecoins give to the US dollar in foreign exchange markets and the financial moat stablecoin-driven demand will create around the US dollar’s global reserve currency status.

Stablecoin market overview. Source: RWA.XYZ

Related: Certain stablecoins aren’t securities, SEC says in new guidance

US government looks to stablecoins to protect US dollar

Pellegrino cited Tether’s emerging role as one of the largest buyers of US Treasury bills in the world as evidence of the demand for US debt instruments from stablecoin issuers.

Tether recently became the seventh-largest holder of US Treasuries, beating out Canada, Germany, Norway, Hong Kong, and Saudi Arabia.

Speaking at the White House Crypto Summit on March 7, US Treasury Secretary Scott Bessent said the Trump administration would leverage stablecoins to extend US dollar hegemony and indicated this would be a top priority for officials in 2025.

According to a 2023 report from Chainalysis, over 50% of all the digital asset value transferred to countries in the Latin American region, including Argentina, Brazil, Columbia, Mexico, and Venezuela was denominated in stablecoins.

The low transaction fees, relative stability, and near-instant settlement times for dollar-pegged stablecoins make these real-world tokenized assets ideal for remittances and stores of value for residents in developing countries suffering from high inflation and capital controls.

Magazine: Bitcoin payments are being undermined by centralized stablecoins

Bitcoin (BTC) turned up volatility into the April 6 weekly close as fears of a stock market crash contrasted with bullish BTC price targets.

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

CNBC’s Cramer: 1987 crash not “off the table yet”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dropping below $80,000 on the day, down 3% since the start of the week.

The days in between had seen several bouts of flash volatility as US trade tariffs and recession concerns stoked major losses across risk assets.

US stocks in particular recorded significant losses, with both the S&P 500 and Nasdaq Composite Index finishing the April 4 trading session down nearly 6%.

“Trump’s tariff announcement this week has wiped out $8.2 TRILLION in stock market value — more than was lost during the worst week of the 2008 financial crisis,” author and financial commentator Holger Zchaepitz summarized in a response on X.

Bloomberg World Exchange Market Capitalization chart. Source: Holger Zschaepitz/X

The poor close caused some to wonder how the coming week would open, with comparisons to the “Black Monday” 1987 crash surfacing across social media.

“It’s tough to build a new, weaker, world order on the fly,” Jim Cramer, host of CNBC’s “Mad Money” segment, argued on X over the weekend.

“Frantically trying to do it but don’t see anything yet that takes the October 87 scenario off the table yet. Those who bottom-fished are sleeping with the fishes …so far.”

S&P 500 1-day chart. Source: Cointelegraph/TradingView

Cramer had previously warned over a 1987 scenario playing out live on air, but subsequently reasoned that control mechanisms in the form of market circuit breakers “could slow things down.”

Bitcoin circles also saw some daring predictions of how markets would behave in the short term. Max Keiser, the popular yet controversial Bitcoin supporter, even called for BTC/USD hitting a giant $220,000 before the end of the month.

“A 1987 style mega crash will push Bitcoin to $220,000 this month as trillions in wealth seek the ultimate safe haven: Bitcoin,” he wrote in part of an X response to Cramer. 

Bitcoin resists copycat BTC price dive

Among traders, the diverging sentiment over Bitcoin and stocks was increasingly apparent.

Related: Bitcoin crash risk to $70K in 10 days increasing — Analyst says it’s BTC’s ‘practical bottom’

After withstanding the worst of the tariff shock last week, many argued that the coming days could even result in pronounced BTC price upside.

$BTC – #Bitcoin: Ofcourse we can go lower first. However I think we will see the last push of this cycle soon. pic.twitter.com/dp6otpgE16

— Crypto Caesar (@CryptoCaesarTA) April 5, 2025

Bitcoin is gearing up for a breakout next week — the $150K run might just be starting!$BTC #Bitcoin pic.twitter.com/jNWNoiHnwo

— @CryptoELlTES (@CryptooELITES) April 5, 2025

“$BTC Volatility going lower and lower while the $VIX (Volatility Index) on Stocks has closed at the highest level since the Covid Crash in 2020,” popular trader Daan Crypto Trades acknowledged in his latest analysis.

“This is pretty unheard off and due to this compression I’m pretty confident a large move for crypto is going to occur next week as well. Whether it’s up or down comes down to whether stocks can find a bottom early in the week or not I’m assuming.”

BTC/USD vs. VIX volatility index chart. Source: Daan Crypto Trades/X

Fellow trader Cas Abbe suggested that recent $76,000 lows on BTC/USD may end up as a classic fake breakdown.

“This looks no different than the post-ETF dump and August 2024 crash,” he told X followers. 

“I’m waiting for a weekly reclaim of $92,000 to confirm the uptrend.”

BTC/USDT 1-week chart. Source: Cas Abbe/X

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

The Consumer Financial Protection Bureau (CFPB) will likely see a reduced role in crypto regulations as other federal agencies like the Securities and Exchange Commission (SEC) and state-level regulators assume a bigger role in crypto policy, according to Ethan Ostroff, partner at the Troutman Pepper Locke law firm.

“I think with the current administration, my sense is, we are highly likely to see a significant pullback by the CFPB in the context of the activity by other regulators,” Ostroff told Cointelegraph in an interview.

State regulators also have the authority under the Consumer Financial Protection Act (CFPA) to assume some of the regulatory roles of the CFPB, the attorney said but also added that some regulatory functions will continue to fall within the purview of the CFPB as a matter of established law.

Ostroff cited the New York Department of Financial Services (NYDFS) and the California Department of Financial Protection and Innovation (DFPI) as regulators to keep an eye on as potential leaders of crypto regulations at the state level.

However, the attorney clarified that while the CFPB may see a diminished role during the Trump administration, the agency would not be outright dismantled during the current regime due to “statutorily mandated obligations and requirements” that require acts of Congress to change.

Related: Elon Musk’s ‘government efficiency’ team turns its sights to SEC — Report

Trump administration targets CFPB in efficiency push

The Trump administration targeted the CFPB as part of a broader push by the Department of Government Efficiency (DOGE) to slash government spending and reduce the federal debt.

Russell Vought, the recently appointed head of the CFPB, announced major funding cuts to the agency and scaled back operations within days of assuming the helm at the CFPB in February 2025.

Source: Russell Vought

Massachusetts Senator Elizabeth Warren criticized Elon Musk for dismantling the CFPB, which the US senator co-founded back in 2007.

Warren characterized Musk as a “bank robber” and claimed that the Trump administration dismantled the CFPB to undo consumer protection rules and have greater control over the financial system.

In a February 12 interview with Mother Jones, the senator stressed that the Executive Branch of government does not have the statutory authority to fully dismantle the CFPB, which can only be done through Congressional approval.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered