U.S. Dollar’s Reserve Role Strengthened by Stablecoins

U.S. Dollar to Retain Global Reserve Status via Payment Stablecoins, Says Treasury Secretary Scott Bessent

U.S. Dollar’s Future as Global Reserve Currency Strengthened by Payment Stablecoins, According to Treasury Secretary

The U.S. dollar is set to maintain its position as the world’s primary reserve currency through the growing adoption of payment stablecoins, Treasury Secretary Scott Bessent affirmed during his June 11 testimony before the Senate Appropriations Committee (SAC).

Bessent emphasized that stablecoins backed by U.S. Treasuries and T-bills will broaden the global reach of the dollar. He projected that the stablecoin market cap, currently valued in the hundreds of billions, could expand well beyond $2 trillion, stating:

This testimony aligns with recent legislative momentum, as the Senate stablecoin bill known as the GENIUS Act cleared a crucial vote on June 10, increasing its chances for enactment in Q3 2025.

Stablecoins Drive Demand for U.S. Treasury Bills

Stablecoins’ importance extends beyond digital payments; they have become key players in the U.S. Treasury bills market. A May 2025 Treasury Department report underscored this growing role, highlighting how stablecoin issuers are among the largest purchasers of T-bills.

For example, Tether, the issuer of USDT, the world’s largest stablecoin by market capitalization, ranks as the 19th top net buyer of U.S. Treasury bills, holding approximately $119 billion in T-bills as reserves backing USDT.

Tether’s reserve composition reveals that T-bills constitute about 81% of its reserves, with the remaining backed by Bitcoin (BTC), loans, and precious metals, underscoring a strong preference for risk-minimized assets.

Similarly, Circle, the issuer of the USDC stablecoin, maintains a nearly identical reserve structure, reflecting a market-wide trend among leading stablecoin providers to anchor their digital currencies firmly to U.S. government debt instruments.

GENIUS Act: Legal Framework and Market Confidence

The proposed GENIUS Act aims to create a clear, robust legal framework for onshore stablecoin issuers, offering consumer protections while curbing illicit financial activities.

By legitimizing and regulating stablecoin issuance in the United States, the bill could unleash significant pent-up demand for investment exposure in this sector. Evidence of this growing confidence was seen in the remarkable performance of Circle’s IPO, where the stock symbol CRCL surged by over 300%, climbing from $31 pre-IPO to more than $120 before a modest correction.

Rapid Growth of the Stablecoin Sector: From $5 Billion to $251 Billion Market Cap

The stablecoin industry has experienced explosive growth over the past five years, expanding more than 50-fold from a modest $5 billion to a substantial $251 billion market capitalization today.

Within this ecosystem, Tether’s USDT dominates, holding 62% of the total market cap, followed by Circle’s USDC at approximately $60 billion.

A future sustained expansion to a $2 trillion market cap — as forecasted by Secretary Bessent — would represent an eightfold increase from current levels, underscoring the sector’s massive growth potential.

Use Cases Driving Stablecoin Expansion

Stablecoins have gained traction as critical tools in global remittances, cross-border payments, and business-to-business transactions, owing to their stability, speed, and lower costs compared to traditional banking methods.

As digital payment infrastructures evolve, stablecoins backed by U.S. government securities provide a trusted, transparent, and liquid medium for transacting value worldwide, enhancing the dollar’s global utility beyond physical currency and traditional banking channels.

Why Clear Regulation Is a Game-Changer

Regulatory clarity, as sought through legislation like the GENIUS Act, is widely seen as the essential catalyst for widespread stablecoin adoption and market maturation. It promises to:

• Establish standards for reserves and operational transparency.

• Protect consumers and institutional investors.

• Foster innovation within a compliant framework.

• Deter illicit activities and fraud risks.

Such developments would attract more capital from traditional financial sectors, institutional treasuries, and global corporations eager to leverage the benefits of AI-driven blockchain payment systems backed by the U.S. dollar.

Conclusion: Stablecoins Cement the U.S. Dollar’s Reserve Currency Status

As stablecoins increasingly tie their value to U.S. Treasury securities, the digital dollar emerges as a powerful vehicle for global commerce and financial stability.

Secretary Scott Bessent’s outlook, combined with legislative progress on the GENIUS Act and strong market dynamics, suggests that payment stablecoins will not only preserve but potentially expand the U.S. dollar’s dominance as the world’s reserve currency in the digital era.

This shift is poised to reshape the global financial landscape, reinforcing America’s economic leadership through the seamless integration of blockchain technology and traditional finance.

Dimitar Todorov publication: "U.S. Dollar’s Reserve Role Strengthened by Stablecoins" was written for 24crypto.news

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