Kim Gap-rae, Head of Capital Market Research Institute: "U.S. Crypto Asset Promotion Strategy to Maintain Dollar Hegemony"

Under the new administration of President Donald Trump, as the legislation of crypto assets (cryptocurrency) such as the strategic reserve of Bitcoin (BTC) and the legislation of stablecoins (crypto assets linked to the value of fiat currency) accelerates, there is an argument that the U.S. is taking these moves to strengthen the dollar hegemony.

Kim Gap-rae, Head of Capital Market Research Institute (second from the right in the photo), participated in the 'National Assembly Forum for Enacting the Digital Asset Basic Law' hosted by Kang Jun-hyun, secretary of the Political Affairs Committee, at the National Assembly in Yeouido on the 6th, and said, "In the U.S., the president is fostering new industries by issuing meme coins and creating a crypto asset task force, speeding up the promotion of the crypto asset industry," adding, "The U.S. allows this because if it can maintain the dollar hegemony and national finances by utilizing crypto assets, it can tolerate this level of risk."

Kim further stated, "The difference between the Biden administration and the Trump administration is the degree of boldness in the strategy to maintain dollar hegemony." He added, "The Trump administration is trying to maintain dollar hegemony even in the digital asset market by actively utilizing blockchain-based payment networks."

In particular, Kim noted that there is a need to pay attention to stablecoins in this regard.

Kim said, "On the 4th, a stablecoin bill was introduced in the U.S. It's not because the existing U.S. legislation is lacking. The U.S. has already applied three principles to accept suitable stablecoins and grow the market," emphasizing, "The purpose of introducing the stablecoin bill this time is to create an environment where traditional finance and decentralized finance can combine through stablecoins."

He also mentioned, "Even in Korea, the circulation of dollar-based stablecoins like Tether (USDT) is enormous. Meanwhile, there is also a phenomenon where a premium is attached to Tether," and stressed, "There is a need to quickly reorganize domestic stablecoin-related regulations."

Explanations about the U.S.'s strategic reserve of Bitcoin continued. Kim explained, "President Trump signed an executive order to create a sovereign wealth fund for the U.S. Considering that countries with sovereign wealth funds like Singapore and Northern Europe already hold Bitcoin, it seems certain that Bitcoin will become a reserve asset, although it is uncertain whether it will become a strategic asset."

He predicted that the U.S. might hard fork the Bitcoin it has reserved in the future. Kim said, "If the U.S. hard forks Bitcoin (the act of updating a crypto asset to create another crypto asset) that has passed the Know Your Customer (KYC) process, the scarcity and transparency of Bitcoin can be further enhanced."