Trump administration weighs global push for dollar stablecoins

Bloomberg reports that the Trump administration is weighing a strategy to actively promote U.S. dollar-backed stablecoins globally. The initiative seeks to secure the dollar's position as the primary global reserve currency while driving demand for U.S. Treasury securities.

CoinDesk notes that the plan may feature joint ventures with private firms to broaden the use of these digital tokens abroad. The Treasury Department, State Department, and the U.S. International Development Finance Corporation could take on central roles in the effort.

Treasury Secretary Scott Bessent has characterized dollar-backed stablecoins as an instrument that supports the currency's dominance. "The dollar accounts for nearly 90% of foreign exchange transactions," he stated.

USDT and USDC, the two largest stablecoins, are pegged 1:1 to the dollar. They represent nearly the entire value of the $292.49 billion stablecoin market. Regulations under the U.S. Genius Act mandate that issuers maintain reserves consisting of cash and short-term government debt. As these entities have accumulated holdings approaching $200 billion, they rank within the top 20 creditors of the U.S. government.

The International Monetary Fund and the Bank for International Settlements have cautioned that broader stablecoin usage might speed up capital outflows and erode the strength of local currencies in developing nations. These bodies contend that blockchain transfers circumvent conventional banking routes, complicating the ability of policymakers to track financial movements.