Stablecoins and the Eurodollar market: complementary forces or disruptive alternative?

Stablecoins are increasingly emerging as a complementary force to the traditional Eurodollar market and potentially a disruptive alternative in the global financial ecosystem. Whilst not yet positioned to fully replace this massive shadow banking system, stablecoins represent a significant evolution in how dollar-denominated value moves across borders. This article explores the relationship between these financial mechanisms, their current trajectories and the implications for global finance and national security. The Eurodollar market encompasses US dollar-denominated deposits held outside the United States, primarily in international banks and offshore accounts. And with an estimated value at approximately $13 trillion, this shadow banking system has been fundamental to global liquidity since the 1950s. The market serves multinational corporations, governments and financial institutions seeking dollar access without direct US regulatory oversight. Key characteristics of the Eurodoll…