I have a DeFi vs TradFi hypothesis, but let me set it up first...

The US dollar's monetary base is ~$ 6 trillion. After that base has been fractionally reserved, it balloons into what we call M2, which sits at around ~$ 21 trillion. In response to the pandemic, the US minted (depending on sources) between $ 1-3 trillion, which is what's been fueling the inflation the US has been suffering from in recent years.

My hypothesis is that, once crypto's market cap grows to something comparable to the M2 money supply, then crypto backed DeFi lending will start to become the primary driver of Dollar inflation. Between a combination of significant stablecoin spending on real world assets and centralized stablecoin providers purchasing US treasuries to back their stablecoins, we could see runaway inflation that encourages even more DeFi lending as well as stablecoin issuers forcing real world interest rates to zero. As a result, the Federal Reserve would ultimately run out of treasuries to sell (in an effort to keep interest rates high, needed to fight inflation), and then become powerless. This scenario, if it plays out like this, would end the dollar as well as stablecoin issuers.

To get such a scenario going, it may just take a similar amount of loaned stablecoin spending compared to pandemic dollar spending.

How it's spent also plays a major factor, like whether it's spent directly on goods (inflationary) vs paying off real world debts (deflationary, shrinks M2).