Key highlights:
- Treasury Secretary Bessent said stablecoins can strengthen dollar dominance, calling it a shift from a “military umbrella” to a “technology umbrella,” and said the U.S. will “win in the digital asset stack.”
- He sees stablecoins as a new source of Treasury demand, since over 90% are dollar-backed and issuers hold T-bills as reserves, while also bringing dollar access to emerging markets facing inflation and currency instability
- After the CLARITY Act’s failure, Bessent said Treasury will use its convening power with the SEC and CFTC to set guardrails, including against debanking of crypto firms, though agency-led rules lack the permanence of legislation
U.S. Treasury Secretary Scott Bessent has identified stablecoins as an emerging tool for strengthening the dollar’s position in the global financial system.
He argued that the technology behind digital assets could extend American economic influence while creating another source of demand for government debt.
Speaking at Ripple’s Swell conference alongside CEO Brad Garlinghouse, Bessent said technological leadership is becoming increasingly important to the strength of global reserve currencies, which have historically depended heavily on military and economic power.
“We will keep our military umbrella, but I think more and more it’s becoming a technology umbrella,” Bessent said.
Stablecoins as a tool for strengthening the U.S. dollar
He pointed to the growing competition between the United States and China over artificial intelligence and semiconductor technology, noting that countries and businesses are increasingly choosing which technology ecosystems they want to rely on.
In his view, digital assets are becoming part of that competition, with the financial infrastructure adopted by countries potentially influencing the international reach of their currencies.
“I think that digital assets are going to be no different, and we are going to win in the digital asset stack, and that’s gonna continue to fortify the dollar,” he said.
Bessent’s remarks reflect the Trump administration’s broader effort to position the United States as a leading destination for cryptocurrency businesses and digital asset development.
Stablecoins have become an important part of that strategy because most of the market is already denominated in U.S. dollars, creating a direct connection between their adoption and demand for American currency.
More than 90% of stablecoins are backed by the U.S. dollar, according to Bessent.
Their issuers also maintain reserves to support the value of tokens in circulation, with U.S. government securities forming an important part of those holdings.
This creates another potential source of demand for U.S. Treasury securities. When stablecoin issuers receive dollars from customers in exchange for newly issued tokens, they must maintain sufficient reserves to support redemptions.
Those reserves can include short-term government debt, meaning an expanding stablecoin market could translate into additional purchases of Treasury bills.
“I think it’s gonna be an important source of funding for the Treasury,” Bessent said.
U.S. moves to strengthen stablecoin oversight with new federal rules
The Treasury secretary also challenged the suggestion that stablecoins simply move existing dollar holdings from traditional financial accounts into digital wallets.
He argued that dollar-backed tokens could introduce American currency to people in emerging economies who face inflation, currency depreciation, and limited access to reliable financial services.
“I think we are opening up new markets all around the world,” he added.
For people living in countries with unstable local currencies, dollar-backed stablecoins can provide access to an asset whose value is tied to the U.S. dollar.
They can also be transferred across blockchain networks without relying entirely on conventional banking infrastructure.
The administration has already taken legislative steps to support the market through the GENIUS Act, signed into law in July 2025. The legislation established a federal framework for payment stablecoins, requiring issuers to maintain one-to-one reserves and comply with regulatory and disclosure requirements.
Can U.S. regulators protect crypto companies from debanking?
The GENIUS Act is intended to provide clearer operating conditions for stablecoin companies while establishing safeguards around the assets backing their tokens.
It also creates a pathway for traditional financial institutions to participate in the growing market.
However, the administration’s broader attempt to establish clearer cryptocurrency regulations has encountered legislative difficulties.
Also, Congress failed to advance the CLARITY Act, which was designed to establish a wider regulatory framework for digital assets and clarify the responsibilities of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
Bessent described the setback as disappointing but said the Treasury Department could continue working with both agencies to develop regulatory standards through existing government authorities.
“At Treasury, we have a lot of convening powers,” he said, describing the SEC and CFTC as important partners in developing rules that could eventually serve as a model for other countries.
He also addressed concerns about debanking, where financial institutions withdraw banking services from cryptocurrency businesses.
Bessent said the CLARITY Act could have helped prevent such practices but maintained that regulators could establish safeguards to protect legitimate crypto companies.
“I think we can set up regulatory best practices, guardrails that will prevent that from happening again,” he said.
While agency-led measures could provide some clarity, they would not carry the same permanence as legislation passed by Congress.