Key Insights:
- In the latest stablecoin news, Coinbase CEO reignites the crypto market conversation with a bold statement about the US collapse.
- A look at what would really happen if the US dollar collapses.
- Gold-backed PAX Gold would have been the ideal stablecoin to hold over the last few months.
In 2025, stablecoin news made headlines as the US government made aggressive moves in their favor. Stablecoins are back in the crypto market trends now, as everything has been crashing.
The GENIUS Act in particular was one of the key narratives driving stablecoin news. However, there is one facet of the market that has mostly been overlooked, but Coinbase CEO Brian may have just steered the conversation in that direction.
Armstrong addressed stablecoin news, stating that banks were worried about stablecoins. He pointed out that financial institutions have been pushing towards stablecoin ownership.
The Coinbase CEO noted that some of the top banks in the world were adopting stablecoins as a strategic survival strategy. Armstrong also stated that stablecoins were among the safest assets in the world, given that they are tied to US treasuries, courtesy of the GENIUS Act.
But perhaps even more noteworthy was Armstrong’s statement that stablecoins were the safest unless the US collapses.
Stablecoin News: Impact of Dollar on the Coins
The caveat in Armstrong’s statement was not out of place but rather a probable outcome given the current state of events. In January, the US dollar faced intense pressure as sovereign debt continued to weigh down heavily.
Externally, the Japanese Yen’s potential collapse placed more strain on the dollar. Moreover, countries such as China and India have been dumping US treasuries.
In addition, the breakdown of geopolitical ties also affected confidence in the US government, and this led to weak demand for US treasuries across the globe.
In other words, these factors have been weighing heavily on the US dollar. The possibility of a US dollar collapse is now higher than ever before. Interestingly, such an outcome would also spell doom for US dollar-pegged stablecoins.
The adoption of dollar-backed stablecoins by the banking industry means the impact of that collapse would also spread into WEB3. Under such conditions, stablecoin holders would also value largely through inflation and currency devaluation.
This explains why Brian Armstrong added the caveat, hinting that it may not be ideal to hold stablecoins if the US dollar collapses.
Crypto Market: Solution for the Currency Collapse
Dollar collapse fears suggest that the crypto market and stablecoin holders should be looking elsewhere to avoid value erosion. As per the stablecoin news, Gold-pegged coins may offer an ideal alternative.
Over the last few months, gold prices have been rallying as the crypto market bled. The liquidity flows into gold highlighted its usefulness as a safe-haven asset.
Interestingly, gold-pegged coins already exist. Take, for example, the PAX Gold coin, which is backed by gold, was up 11% from its opening to closing price in January.
PAX Gold prices were almost on par with actual gold prices. This means it would have been an ideal crypto asset to hold in January as the market rallied.
PAX Gold stablecoin has since retreated after the recent wave of sell pressure. However, the crypto market also concluded January in the red, courtesy of the prevailing uncertainty and extreme fear in the broader markets.
Meanwhile, the liquidity that exited gold and silver may be explained by the DXY, which was up by over 1.5% in the last 4 days. This surge suggests that investors are now hoarding cash, waiting to see where the liquidity will flow next.