- The Treasury Secretary says stablecoins backed by US Treasuries can boost global demand and support dollar dominance worldwide.
- The GENIUS Act sets strict rules for stablecoin issuers to protect users and strengthen the US financial system.
- Major banks and crypto firms are preparing for stablecoin expansion as new federal laws offer clear market direction.
Treasury Secretary Scott Bessent stated that cryptocurrency does not pose a threat to the U.S. dollar. His comments followed the Senate’s approval of the GENIUS Act. The bill aims to regulate the growing stablecoin market in the United States.
Bessent emphasized the benefits of a stablecoin system tied to short-term U.S. Treasuries. He explained how stablecoins could support dollar dominance instead of competing with it. The administration has backed this view as it moves toward tighter regulation of digital assets.
Stablecoins Could Strengthen the Dollar
Bessent noted that stablecoins can contribute to strengthening the position of the dollar in the world. Stablecoins can also be appealing to international investors when they are backed by U.S. Treasuries. This would raise the demand of dollar-linked assets and would allow sustaining the currency at a high level.
He said that the stablecoin market could grow to over $2 trillion by 2028. That growth depends on clear and secure regulation. Today, the stablecoin market already holds more than $240 billion in value.
A regulated stablecoin ecosystem could bring new users into the digital dollar space. This would extend the reach of the U.S. dollar into new markets. Officials believe this could also improve access to financial tools worldwide.
GENIUS Act Sets Standards for Stablecoins
The Senate passed the GENIUS Act by a 68-30 vote. The bill now moves to the House of Representatives. It introduces strict rules for stablecoin issuers in the U.S. market.
The law requires stablecoins to be fully backed by liquid assets. These include short-term U.S. Treasuries and insured bank deposits. It also bans interest payments on stablecoins.
Issuers with over $10 billion in liabilities must obtain a federal charter. Smaller issuers can follow state-level rules under federal oversight. The Treasury Department will monitor audits and ensure full compliance.
The act also requires due diligence on customers. Stablecoin companies must follow Bank Secrecy Act reporting rules. It also mandates the separation of reserves from company operating funds.
Market Reactions and Industry Plans
The market responded quickly to the bill’s passage. Circle Internet shares rose by 18% after the vote. Coinbase stock climbed 10% the same day.
Mastercard and Visa both saw their shares fall by 2%. Investors showed concern that stablecoins may challenge traditional payment systems.
Major banks are also preparing for stablecoin adoption. Some are planning pilot programs in response to the coming rules. They are waiting for final decisions from the House before launching full services.
