Citibank said in its latest report that stablecoins not only have the potential to solidify the dominance of the U.S. dollar, but also challenge the claim that bitcoin will one day end its dominance. "Initially, cryptocurrencies such as bitcoin were seen as competitors to central bank-issued currencies. In fact, some believed - and still believe - that bitcoin could end the dollar's hegemony. However, USDT is challenging that narrative," analysts said in the report. Citi noted that the vast majority of stablecoins are pegged to the dollar, while issuers hold both dollars and US Treasury bonds. Analysts also said that if the US government further legalized stablecoins, this could enhance the dominance of the dollar.