In a significant move, US Treasury Secretary Scott Bessent announced at the White House Crypto Summit that the US government plans to utilize stablecoins to solidify the dollar’s position as the world’s dominant reserve currency. This strategy aims to maintain the dollar’s global standing by leveraging stablecoins, particularly those backed by short-term US Treasury bills and cash deposits. The summit, which drew the who’s who in the US crypto industry, was held 7 March 2025 at the White House.
Bessent reiterated the Trump administration’s commitment to ending the “war on crypto” and rolling back previous IRS guidance and punitive regulatory measures. The administration plans to use stablecoins to drive demand for US debt instruments, thereby supporting the dollar’s global dominance.
“We will think long and hard about the stablecoin regime and, as President Trump ordered, we will maintain the U.S. dollar as the dominant reserve currency in the world and we will use stablecoins to achieve that.”
Stablecoins and Dollar Dominance: Tether leveraging Donald Trump’s “America First” agenda?
Federal Reserve Governor Christopher Waller has also voiced support for using stablecoins to maintain the dollar’s dominance. Waller argued that stablecoins could mitigate the corrosive effect of cryptocurrencies on the US dollar’s market share.
In February 2025, Waller reiterated his stance that stablecoins could help preserve the dollar’s status as the global reserve currency by overcoming capital controls in foreign countries and enhancing payment rails.
Interestingly, as reported by The Guardian, Tether’s CEO, Paolo Ardoino, “We have 400 million users in emerging markets…. “We are basically selling the US debt outside the US … We are decentralizing the US debt as well, basically pushing for dollar hegemony. That’s how the US can maintain its dominance when it comes to its currency.”
Tether, a stalwart in the crypto world, boasts an impressive portfolio as the 17th largest holder of US government debt. Its treasure trove of treasury bonds rivals that of Saudi Arabia, underscoring its formidable presence. Tether’s value remains stable, pegged at a one-to-one ratio with the US dollar, ensuring each coin’s value remains at $1. To maintain this stability, Tether backs its cryptocurrency with a substantial cache of dollar assets, including $140 billion deposited with Cantor Fitzgerald.
Investors from countries plagued by currency volatility, such as Argentina, Nigeria, and Turkey, rely on Tether to safeguard their savings against the dollar’s value. Also, crypto traders utilize Tether as a secure haven to park their digital assets.
Read also: Stablecoins in the European Market: MiCA, Tether, and Potential impacts on USDT
A Turning Point for US Crypto Policy
The White House Crypto Summit, attended by over 20 leaders from the crypto industry, marks a decisive turning point in the US strategy on digital assets. The Trump administration’s promise to end the “war on crypto” and roll back punitive regulatory measures has been welcomed by industry insiders.
President Trump expressed his hope that lawmakers will pass a comprehensive stablecoin regulatory bill before the August Congressional recess ¹. Additionally, Trump criticized the Biden administration for selling portions of seized bitcoin, which he claimed resulted in billions of dollars in losses due to premature selling.
A New Era for Stablecoins and Regulatory Framework
Stablecoins, digital tokens pegged to the value of the US dollar, are poised to play a crucial role in maintaining the dollar’s hegemony. By utilizing over-collateralized stablecoins backed by Treasury bonds and dollar deposits, the US government aims to stimulate demand for US debt instruments and consolidate its financial influence globally.
To facilitate this vision, Representatives French Hill and Bryan Steil have introduced the “Stable Act of 2025,” a comprehensive bill aimed at establishing a clear regulatory framework for dollar-pegged digital fiat tokens.
This legislation is expected to provide legal certainty and foster innovation in the sector.
The US government’s plan to leverage stablecoins to reinforce the US dollar’s dominance as the global reserve currency has significant implications for the global financial landscape. By utilizing over-collateralized stablecoins backed by Treasury bonds and dollar deposits, the US government aims to stimulate demand for US debt instruments and consolidate its financial influence globally.
Read also: Stablecoins for stable markets: Why regulators should put market stability first
Conclusion
In conclusion, while the US government’s decision to harness the power of stablecoins marks a significant shift in its approach to digital assets, it also raises important concerns about the potential impacts on other countries’ financial systems.
Read also: UK to pass stablecoin legislation as Trump promises to lessen digital assets regulation
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