There have been many news stories over the past year about how China, Europe, and other nations are racing to become the first country with an official national digital currency. Essentially, a national blockchain-based currency would massively increase economic efficiency and give governments even tighter control of the flow of money, and therefore whoever launches it first will have an edge over the global economy.

That being said, the race may have already been won by the United States thanks to the free market. The amount of circulating stablecoins, primarily Tether (USDT) and USD Coin (USDC), has skyrocketed from less than $6 billion at the beginning of this year to over $20 billion currently. 

Further, it appears the exponential growth of stablecoins will continue for the foreseeable future, since stablecoins are catching on as a highly secure and instant form of currency. 

Since almost the entire stablecoin market cap is comprised of USD-pegged stablecoins, this means the United States already has a flourishing USD digital currency, and in fact multiple forms of it since there are multiple major USD stablecoins. 

Therefore, the United States really doesn’t have to lift a finger, and the Fed does not need to launch a USD national digital currency, since the free market has already done it, and USD-pegged stablecoins are exponentially spreading across the globe.

Considering this, perhaps it is more appropriate to say that China, Europe, and other nations are racing to launch a competitor to USD digital currency, rather than launching the first national digital currency, since the reality is that USD stablecoins have already taken root worldwide. 

On a final note, the fact that the USD has become by far the preferred peg for stablecoins will likely help to maintain the USD’s dominance in the global currency markets long term. Right now this effect is small, but if stablecoins continue to grow exponentially like they are, it could one day have a significant effect for propping up the USD’s value.