BTC and USD Stablecoins: Symbiotic Relationship

Bitcoin Policy Institute (BPI) research director Sam Lyman emphasized a symbiotic relationship between USD-pegged stablecoins and Bitcoin (BTC). BTC's largest trading pair is BTC/USD or Tether's USDT stablecoin, backed by cash deposits and short-term US government bonds. Lyman stated that BTC's frequent trading with the dollar strengthens the dollar system, contrary to the view that BTC weakens the dollar, and that they are mutually supportive.

Petrodollar Analogy: The Power of BTC/USD Trading Pairs

Lyman, who likened this relationship to the petrodollar system where oil has been priced in dollars since the 1970s, noted that BTC/USD pairs account for more than 70% of market volume. This structure reinforces US hegemony by increasing dollar demand. According to current data, dollar-based pairs also maintain their dominance in BTC futures.

US dollar-based trading pairs dominate the BTC market. Source: CoinMarketCap

GENIUS Regulation Proposal to US Lawmakers

Lyman advised US lawmakers to develop the GENIUS regulatory framework without deviating from core principles to protect dollar hegemony. This framework aims to support the innovative crypto ecosystem while regulating stablecoins, strengthening BTC's integration with the dollar and providing a competitive edge in global competition.

China's Crypto Ban and Bitcoin Mining Dominance

The People's Republic of China has banned BTC and stablecoins multiple times, viewing them as threats to capital controls. According to Lyman, the Chinese economy depends on capital controls to prevent capital outflows by elites. In 2025, it renewed the stablecoin ban and launched a yield-bearing digital yuan CBDC. However, the bans could not stop permissionless crypto activities; Chinese mining pools control 36% of the global hashrate (Hashrate Index data). This demonstrates the BTC network's independence from Chinese influence.

Data from 2024 also reflects the dominance of the dollar in BTC markets. Source: Kaiko

These dynamics highlight the critical role of dollar support in BTC's competition with altcoins.