The GENIUS Act established reserve requirements that could link wider stablecoin circulation to demand for dollars and short-term Treasuries.
The Trump administration is reportedly considering an initiative to promote dollar-denominated stablecoins overseas.
The goal, according to a Bloomberg report citing people familiar with the plans, is to protect the dollar’s place as the world’s reserve asset and to raise demand for US Treasuries, which stablecoin issuers typically hold as reserves.
Joint Ventures and Federal Agencies Under Discussion
Per the report, the initiative could involve several federal agencies, including the Treasury Department and the State Department. The US International Development Finance Corp. (DFC) could also be part of the plan.
One option under consideration involves creating joint ventures between the government and private-sector firms to support stablecoin projects in overseas markets.
That’s probably where the DFC would come in, as it often partners with private companies to advance US foreign policy goals, and its head is incidentally Ben Black, son of Apollo Global Management co-founder Leon Black. Apollo has reach in crypto and stablecoins, including a partnership with Coinbase Asset Management that lets users borrow against their digital assets.
Stablecoins are typically pegged to traditional currencies, with issuers generally maintaining reserves in cash and short-term government debt to back the tokens, and the US government’s proposal will focus on the dollar-backed versions, which could create a potential source of demand for US Treasuries as their circulation expands.
President Donald Trump signed the GENIUS Act into law last year, establishing a federal framework that requires stablecoin issuers to hold reserves that include the dollar and short-term Treasuries. Scott Bessent, the Treasury Secretary, has also argued that stablecoin adoption could strengthen the dollar’s position as the world’s reserve currency.
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Dollar Tokens Dominate, Euro Market Is Still Small
DefiLlama data puts the total stablecoin market cap at about $306 billion, with Tether’s USDT holding nearly 60%. According to RWA.xyz, dollar-pegged stablecoins represent about $305 billion of that market cap, with their euro-backed counterparts holding nearly $805 million, and almost $81 million goes to those pegged to the Brazilian real.
The platform’s net flow data also shows positive flows for several dollar stablecoins, including $1.2 billion for USDC and $1.1 billion for USDT, followed by $819 million for Ethena’s USDe and $355 million for Ripple’s RLUSD. Meanwhile, Visa Onchain Analytics recorded $6.4 trillion in total stablecoin transaction volume over the last 30 days, with a total transaction count of 1.7 billion.
However, Washington’s plan has come at a time when other economies are developing competing payment infrastructure. For example, China’s digital yuan is already being used in Project mBridge, while the European Central Bank is advancing its digital euro project and recently launched an initiative connecting blockchain markets with existing European payment systems.
More than 12 euro stablecoins are now fully authorized under the MiCA framework, including EURR, issued by Stripe-owned Bridge, which Revolut started rolling out to select customers in Denmark, Poland, and Portugal in August.
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