From Inflation Hedge to Trade Finance: Stablecoins, Treasury Bills, and the Digital Dollar Economy
The cryptocurrency market is recent, with a technology that is still developing and has the potential to support innovative and, to some extent, revolutionary ideas. This movement draws on principles defended by economists such as Friedrich Hayek and reaches the libertarian project of Satoshi Nakamoto, who introduced the concept of Bitcoin in 2008 and whose structure remains operational to this today. Among these principles, widely disseminated and defended, for example, by Antonopoulos, several stand out: protection against inflation in countries suffering from hyperinflation; an alternative investment possibility; easier access to international transfers of funds; and the creation, in blockchain environments, of financial products traditionally concentrated within financial institutions, with potential cost reduction and broader financial inclusion through expanded access to financial services. This article explores the three topics mentioned above: the use of volatile Bitcoin as protection against inflation in Venezuela and as an investment in a country with high interest rate such as Brazil; the safety of using stablecoins, through an analysis of the peg and reserves held in Treasury bills by Tether and Circle; and the development of an export receivables assignment product using blockchain technology and stablecoins. The results show that, despite Bitcoin's high volatility and several drawdowns, the asset may still work as protection during a hyperinflationary process. However, at certain moments, such as during crypto winters, holding the local currency may be more advantageous. From an investment perspective, when compared with a country such as Brazil, Bitcoin presents considerable risk relative to a traditional investment linked to the domestic interest rate. The growing stablecoin market may facilitate foreign trade flows, mainly because stablecoins are much more stable than Bitcoin due to their fixed peg. However, events in 2022 and 2023 showed signs of depegging and raised concerns about the assets held in reserve by the companies responsible for managing those reserves. This article applies Granger-Wald causality tests and VAR impulse-response functions to assess whether flows in this market are inversely related to the 3-month T-bill yield. The results indicate that, for USDC, the expected relationship is observed, whereas for USDT it is not. The development of traditional credit products in digital and tokenized formats is already a reality, with several financial instruments being issued on blockchain-based infrastructures. Export receivables assignment through FIDCs is a complex product, involving multiple institutions, foreign exchange settlement, documentation, credit analysis and hedge governance. As tokenized finance and blockchain-based credit structures gain scale, this type of transaction could potentially be adapted to an on-chain environment, despite the legal, operational, regulatory and credit-risk challenges inherent to export receivables financing.
