US Treasury Secretary says stablecoins will fortify dollar dominance
Scott Bessent told Ripple’s Swell conference that dollar-backed stablecoins create key demand for US debt, even as Congress stalled broader crypto legislation.
Key takeaways
- 1Over 90 percent of global stablecoins are backed by US dollars.
- 2Scott Bessent said stablecoin reserves serve as a growing source of Treasury funding.
- 3Congress failed to pass the Clarity Act for comprehensive crypto regulation.
- 4The GENIUS Act previously established a federal framework for stablecoin issuers.
US Treasury Secretary Scott Bessent said on Oct. 27 that digital assets will help strengthen the global dominance of the US dollar while providing a new source of financing for the federal government.
Speaking at Ripple’s Swell conference alongside Chief Executive Brad Garlinghouse, Bessent argued that the power behind reserve currencies derived from military strength in past eras, but global influence is now shifting toward a technology umbrella. He said digital assets are part of that shift and winning the digital asset stack will continue to fortify the US dollar.
Bessent pointed to a growing divide between US and Chinese technology sectors, where foreign nations and companies must choose between competing artificial intelligence systems and semiconductor supply chains. He said digital financial infrastructure represents another area of national competition, with the financial rails that countries adopt directly influencing the reach of the US dollar.
Stablecoins are cryptocurrencies designed to maintain a fixed value against fiat currencies such as the US dollar. Bessent said more than 90 percent of stablecoins are backed by US dollars, with token issuers routinely holding US government securities as reserve assets. He rejected claims that stablecoins merely replace dollars that people already hold, arguing instead that they expand access to US currency in emerging markets where local currencies face inflation or sharp swings in value.
As adoption of dollar-backed stablecoins increases globally, demand for underlying US debt assets could rise, creating an additional source of funding for the Treasury Department. Bessent said opening new international markets for dollar-backed assets will support federal debt issuance as token issuers purchase more government securities.
The Treasury Secretary's comments offered a broader rationale for President Donald Trump’s administration to bring crypto businesses onshore. The administration previously secured passage of the GENIUS Act, which set up a federal regulatory framework for stablecoins, but a broader regulatory framework stalled after Congress failed to pass the Clarity Act.
Bessent called the legislative failure of the Clarity Act a disappointment, CoinDesk reported. He said the Treasury Department would use its convening powers to work with the Securities and Exchange Commission and the Commodity Futures Trading Commission on agency-level rules. Bessent described both regulators as great partners in forming guardrails to protect crypto firms from debanking by traditional financial institutions.
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