Part of a series of writing ~100 words (semi) regularly.
I first ran into the term “cryptodollar” in this article https://unexpected-values.com/crypto-dollars/ where it paints an analogy between a possible future for stablecoins on public blockchains and the global role played by the US dollar today. The comparison originates from “eurodollars” which are essentially off-shore representations of US dollars in non-US accounts. The “euro” prefix is somewhat historical; for example, you can have banking deposits in a Tokyo bank that could show up in an analysis of eurodollars outstanding. Eurodollars exist due to the surplus in utility gained by transacting in the global reserve currency. You gain enough economic efficiency by authoring contracts in the same currency as everyone else that it overcomes the friction of dealing with a non-local currency. Extending the “eurodollar supply” via stablecoin usage seems to be a compelling use case for stablecoins and demonstrates an avenue towards servicing real demand by financial players all around the world. Things should really heat up when holders of “cryptodollars” realize their money is programmble, providing exciting applications in the burgeoning DeFi ecosystem.