US dollar-pegged stablecoins and Bitcoin (BTC<\/a>) share a symbiotic relationship, mutually benefiting from increasing adoption, according to Sam Lyman, head of research at Bitcoin Policy Institute (BPI), a Washington DC-based digital asset advocacy organization.<\/p>\n \u201cBitcoin is beneficial to the US system because the largest Bitcoin trading pair is BTC\/USD,\u201d or Tether\u2019s USDt (USDT<\/a>) stablecoin, which is backed by cash deposits and short-term US government debt, Lyman told Cointelegraph. He added:<\/p>\n \u201cThere is a symbiotic relationship between BTC and the dollar system because BTC is most frequently traded in dollars. So, I do see those things as being mutually reinforcing, which runs contrary to the narrative around BTC that it would actually undermine the dollar.\u201d<\/p><\/blockquote>\n US dollar-based trading pairs dominate the BTC market. Source: <\/em>CoinMarketCap<\/em><\/a><\/p>\n He said Bitcoin and dollar-pegged stablecoins share a similar relationship to the dollar and oil<\/a>. Under the petrodollar system, which began in the early 1970s, international oil sales are priced in dollars, driving more demand for the currency.<\/p>\n Lyman urged US lawmakers to continue developing stablecoin regulations introduced in the GENIUS regulatory framework, without deviating from its core principles, to strengthen and protect US dollar hegemony<\/a> and remain competitive in geopolitics.<\/p>\n Data from 2024 also reflects the dominance of the dollar in BTC markets. Source: <\/em>Kaiko<\/em><\/a><\/p>\n Related: <\/strong><\/em>Stablecoins flip automated clearing house volume in February<\/strong><\/em><\/a><\/p>\n The People\u2019s Republic of China has \u201cbanned\u201d Bitcoin and stablecoins several times, because both are a \u201ctremendous threat\u201d to the government\u2019s capital controls, which are a critical component of the Chinese economy, Lyman told Cointelegraph.<\/p>\n \u201cThe entire Chinese economy depends on capital controls. China is able to keep money within the country by preventing its elite from moving money out of the country,\u201d he said.<\/p>\n This is why China reaffirmed its stablecoin ban in 2025<\/a>, choosing instead to launch the digital yuan<\/a>, a yield-bearing central bank digital currency (CBDC) to control capital flows and capture a larger portion of the foreign currency exchange market, Lyman said. <\/p>\n CBDCs are fully programmable and controlled by the government or the central bank issuing the digital fiat currency.<\/p>\n However, the bans have failed to actually curtail permissionless crypto activity, including Bitcoin mining and stablecoin flows to and from China, Lyman said.<\/p>\n Despite a blanket ban on Bitcoin mining, Chinese mining pools control more than 36% of the mining pool global hashrate, or the total amount of computing power mining pools are contributing to secure the network, according<\/a> to Hashrate Index.<\/p>\n Magazine: <\/strong><\/em>Bitcoin vs stablecoins showdown looms as GENIUS Act nears<\/strong><\/em><\/a><\/p>\n<\/div>\n Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph\u2019s Editorial Policy<\/a> and aims to provide accurate and timely information. Readers are encouraged to verify information independently. <\/p>\n![\"bitcoins\"](\"https:\/\/s3-images.ctmedia.io\/media\/content\/019d5e7e-0930-725e-8ae6-dccca67937f7.png\" "\\"bitcoins\\"")
<\/figure>\n![\"bitcoins\"](\"https:\/\/s3-images.ctmedia.io\/media\/content\/019d5e7f-01f8-7816-9272-3f0a1b7dd12d.png\" "\\"bitcoins\\"")
<\/figure>\nBitcoins China clamps down on permissionless blockchain tech to push for CBDC<\/h2>\n