A US court agreed on July 19 to Binance’s request to put customer funds into U.S. Treasury Bills. The order came from the US District Court for the District of Columbia.
It lets Binance invest “certain” customer funds through a third-party investment manager, as long as those funds aren’t put back into the company or any of its linked businesses.
The court also said that Binance had to include information about any costs that came with keeping the U.S. Treasury investments safe in its monthly report about its operations and business costs.
Binance Boosts Dollar Demand
This court decision shows that cryptocurrency could help keep demand for the U.S. dollar high while the BRICS countries try to get rid of the dollar. For example, collateralized stablecoins have been suggested as a way to keep the U.S. dollar strong by buying and keeping U.S. debt instruments. This would help lower inflation that has been caused by years of quantitative easing and problematic monetary policy.
A prominent stablecoin called Tether owned $72.5 billion in U.S. Treasuries in 2023, which is about the same amount of funds that some developing nation-states hold. As a safety measure against a significant collapse, Tether stresses that its dollar-pegged stablecoin is over-collateralized.
Paul Ryan, who used to be Speaker of the House of Representatives, has said that stablecoins can help solve the debt problem and keep the U.S. dollar strong in international trade. Ryan talked about how popular dollar-pegged stablecoins and the U.S. debt instruments that back them up are.
But some people, like Alex Gladstein, the chief strategy officer of the Human Rights Foundation, say that dollar-pegged stablecoins just keep the current fiat-based system going, which is what autonomous digital currencies were supposed to do away with.
