Crypto CEOs and Congress share a worry: What happens to the U.S. dollar?

Crypto executives were supposed to discuss fraud and manipulation. Instead, members of Congress grilled them about the waning global dominance of the U.S. dollar.

House Financial Services Committee Chair Maxine Waters

The hearing called by committee Chair Maxine Waters was intended to help guide regulation to protect investors and preserve market integrity.

Photo: Stefani Reynolds/Bloomberg via Getty Images

Executives from several of the largest crypto exchanges testified before the House Financial Services Committee on Wednesday — ostensibly to discuss how digital assets could be vulnerable to fraud, manipulation and abuse. The hearing instead took a dramatic turn, as members of Congress focused on the waning role of the U.S. dollar.

The hearing called by committee Chair Maxine Waters was intended to help guide regulation to protect investors and preserve market integrity, concerns that have mounted as crypto markets have gyrated and scammers have made off with millions of dollars. But over the course of the four-hour hearing, a larger theme arose surrounding the threat decentralized cryptocurrencies pose to the dollar’s status as the global reserve currency.

Congressman Blaine Luetkemeyer of Missouri kicked off the discussion on this front. He cited the dominance of the U.S. dollar in foreign exchange markets as a key reason for its status as global reserve currency. Luetkemeyer went on to say that if the U.S. loses its status as the global reserve currency, “our economy, our whole country, our way of life is at risk.”

“I’ve said for a long time that the secular reduction in dollar holdings as a percentage of global central bank holdings is alarming, and this has been going on for more than 10 years at this point,” said Brian Brooks, CEO of Bitfury Group. The European Central Bank and Bank of Japan each reduced their holdings of U.S. dollars from around 80% to 60% of total reserves, according to Brooks, who was the acting comptroller of the Currency until January. IMF data from the end of 2020 showed that the share of U.S. dollar held by central banks had reached its lowest level in 25 years, at around 59%.

Jeremy Allaire, the CEO and co-founder of Circle, called maintaining the U.S. dollar’s global reserve status “not just a national economic priority, a national security priority.” Circle backs a dollar-linked stablecoin, the USD Coin or USDC.

While everyone at the hearing seemed to agree on the problem, coherent solutions didn’t emerge from the conversation. The cryptocurrency executives predictably suggested various fixes that involved the U.S. government embracing private companies in their sector.

“Partnering closely with private companies and using open internet technologies becomes a way for the United States to compete versus states that are seeking to nationalize that infrastructure [and] operate it themselves in a surveillance-oriented model,” Allaire said.

That was a reference to China, which has banned decentralized cryptocurrencies and introduced its own digital yuan. China wants its digital yuan, also known as the e-CNY, to become a global reserve currency, and is working with Thailand and the UAE on a project to lower cross-border central bank payment costs with central bank digital currencies. U.S. politicians have expressed concerns that a digital yuan would give China immense surveillance capabilities, though Chinese officials have insisted that the system affords some anonymity.

Bitfury’s Brooks took a slightly different angle, suggesting that competition from decentralized cryptocurrencies could help “shore up our monetary policy and keep the dollar where it rightfully ought to be, which is as the dominant reserve currency it’s been for all of our lives.”

Brooks also said the U.S. wouldn’t be able to take the primacy of the dollar for granted in the future, and that it would instead have to compete on utility and features — something a shift to internet-enabled dollars would allow.

“There will come a time — gradually, then suddenly — when the attractiveness of the dollar relative to other currencies could change,” he said.

This stance isn’t likely to win over those concerned about the threat posed by cryptocurrencies toward the dollar: Why compete on a “free market” of digital currencies when the U.S. dollar still reigns supreme?

Crypto enthusiasts insist the cat is already out of the bag. They argue the U.S. would be better off embracing innovation rather than unsuccessfully trying to stifle it. The popularity of dollar-linked stablecoins could well cement the dollar’s role instead of eroding it, for example.

Another school of thought, however, would say this is a naive view — that the U.S. dollar doesn’t reign supreme because of technology and “features,” but because of all the other ways the U.S. exerts power over the rest of the world.


How 'Dan from HR' became TikTok’s favorite career coach

You can get a lot of advice about corporate America on TikTok. ‘Dan from HR’ wants to make sure you’re getting the right instruction.

'Dan from HR' has posted hundreds of videos on his TikTok account about everything from cover letters to compensation.

Image: Dan Space

Daniel Space downloaded TikTok for the same reason most of us did. He was bored.

At the beginning of the COVID-19 pandemic, Space wanted to connect with his younger cousin, who uses TikTok, so he thought he’d get on the platform and try it out (although he refused to do any of the dances). Eventually, the algorithm figured out that Space is a longtime HR professional and fed him a post with resume tips — the only issue was that the advice was “really horrible,” he said.

Keep Reading Show less
Sarah Roach

Sarah Roach is a reporter and producer at Protocol (@sarahroach_) where she contributes to Source Code, Protocol's daily newsletter. She is a recent graduate of George Washington University, where she studied journalism and mass communication and criminal justice. She previously worked for two years as editor in chief of her school's independent newspaper, The GW Hatchet.

Sponsored Content

A CCO’s viewpoint on top enterprise priorities in 2022

The 2022 non-predictions guide to what your enterprise is working on starting this week

As Honeywell’s global chief commercial officer, I am privileged to have the vantage point of seeing the demands, challenges and dynamics that customers across the many sectors we cater to are experiencing and sharing.

This past year has brought upon all businesses and enterprises an unparalleled change and challenge. This was the case at Honeywell, for example, a company with a legacy in innovation and technology for over a century. When I joined the company just months before the pandemic hit we were already in the midst of an intense transformation under the leadership of CEO Darius Adamczyk. This transformation spanned our portfolio and business units. We were already actively working on products and solutions in advanced phases of rollouts that the world has shown a need and demand for pre-pandemic. Those included solutions in edge intelligence, remote operations, quantum computing, warehouse automation, building technologies, safety and health monitoring and of course ESG and climate tech which was based on our exceptional success over the previous decade.

Keep Reading Show less
Jeff Kimbell
Jeff Kimbell is Senior Vice President and Chief Commercial Officer at Honeywell. In this role, he has broad responsibilities to drive organic growth by enhancing global sales and marketing capabilities. Jeff has nearly three decades of leadership experience. Prior to joining Honeywell in 2019, Jeff served as a Partner in the Transformation Practice at McKinsey & Company, where he worked with companies facing operational and financial challenges and undergoing “good to great” transformations. Before that, he was an Operating Partner at Silver Lake Partners, a global leader in technology and held a similar position at Cerberus Capital LP. Jeff started his career as a Manufacturing Team Manager and Engineering Project Manager at Procter & Gamble before becoming a strategy consultant at Bain & Company and holding executive roles at Dell EMC and Transamerica Corporation. Jeff earned a B.S. in electrical engineering at Kansas State University and an M.B.A. at Dartmouth College.

1Password's CEO is ready for a password-free future

Fresh off a $620 million raise, 1Password CEO Jeff Shiner talks about the future of passwords.

1Password is a password manager, but it has plans to be even more.

Business is booming for 1Password. The company just announced it has raised $620 million, at a valuation of $6.8 billion, from a roster of A-list celebrities and well-known venture capitalists.

But what does a password manager need with $620 million? Jeff Shiner, 1Password’s CEO, has some plans. He’s building the team fast — 1Password has tripled in size in the last two years, up to 500 employees, and plans to double again this year — while also expanding the vision of what a password manager can do. 1Password has long been a consumer-first product, but the biggest opportunity lies in bringing the company’s knowhow, its user experience, and its security chops into the business world. 1Password already has more than 100,000 business customers, and it plans to expand fast.

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editorial director. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Boost 2

Can Matt Mullenweg save the internet?

He's turning Automattic into a different kind of tech giant. But can he take on the trillion-dollar walled gardens and give the internet back to the people?

Matt Mullenweg, CEO of Automattic and founder of WordPress, poses for Protocol at his home in Houston, Texas.
Photo: Arturo Olmos for Protocol

In the early days of the pandemic, Matt Mullenweg didn't move to a compound in Hawaii, bug out to a bunker in New Zealand or head to Miami and start shilling for crypto. No, in the early days of the pandemic, Mullenweg bought an RV. He drove it all over the country, bouncing between Houston and San Francisco and Jackson Hole with plenty of stops in national parks. In between, he started doing some tinkering.

The tinkering is a part-time gig: Most of Mullenweg’s time is spent as CEO of Automattic, one of the web’s largest platforms. It’s best known as the company that runs, the hosted version of the blogging platform that powers about 43% of the websites on the internet. Since WordPress is open-source software, no company technically owns it, but Automattic provides tools and services and oversees most of the WordPress-powered internet. It’s also the owner of the booming ecommerce platform WooCommerce, Day One, the analytics tool and the podcast app Pocket Casts. Oh, and Tumblr. And Simplenote. And many others. That makes Mullenweg one of the most powerful CEOs in tech, and one of the most important voices in the debate over the future of the internet.

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editorial director. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.


Biden wants to digitize the government. Can these techies deliver?

A December executive order requires federal agencies to overhaul clunky systems. Meet the team trying to make that happen.

The dramatic uptick in people relying on government services, combined with the move to remote work, rendered inconvenient government processes downright painful.

Photo: Joe Daniel Price/Getty Images

Early last year, top White House officials embarked on a fact-finding mission with technical leaders inside government agencies. They wanted to know the answer to a specific question: If there was anything federal agencies could do to improve the average American’s experience interacting with the government, what would it be?

The list, of course, was a long one.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.


5 takeaways from Microsoft's Activision Blizzard acquisition

Microsoft just bought one of the world’s largest third-party game publishers. What now?

The nearly $70 billion acquisition gives Microsoft access to some of the most valuable brands in gaming.

Image: Microsoft Gaming

Just one week after Take-Two took the crown for biggest-ever industry acquisition, Microsoft strolled in Tuesday morning and dropped arguably the most monumental gaming news bombshell in years with its purchase of Activision Blizzard. The deal, at nearly $70 billion in all cash, dwarfs Take-Two’s purchase of Zynga, and it stands to reshape gaming as we know it.

The deal raises a number of pressing questions about the future of Activision Blizzard’s workplace culture issues, exclusivity in the game industry and whether such massive consolidation may trigger a regulatory response. None of these may be easily answered anytime soon, as the deal could take up to 18 months to close. But the question marks hanging over Activision Blizzard will loom large in the industry for the foreseeable future as Microsoft navigates its new role as one of the three largest game makers on the planet.

Keep Reading Show less
Nick Statt
Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at
Latest Stories