The US is supporting stablecoins to help the dollar stay strong as a global currency.
- The US government sees dollar stablecoins as a tool to support its global position.
- New laws, like the GENIUS Act, are being pushed in Congress to regulate stablecoins.
- Other countries are creating non-dollar stablecoins as alternatives.
US Pushes for Dollar-Backed Stablecoins
The US wants dollar-pegged stablecoins to grow. Stablecoins are digital coins backed by regular money, like the US dollar. According to a report by Sygnum Bank, the US sees these coins as a way to stop the dollar from losing power as the world’s main currency.
President Donald Trump and key officials, including Treasury Secretary Scott Bessent and David Sacks, are leading the effort. Sacks leads a science and tech council focused on crypto and AI.
GENIUS Act Moves Through Congress
The government is pushing the GENIUS Act, which aims to set rules for stablecoins in the US. The Act passed the Senate on June 17 and is now being reviewed in the House of Representatives.
The goal is to create clear rules so stablecoin companies can grow, while also protecting people and the financial system.
Global Reactions to Dollar Stablecoins
Not everyone agrees with the US. On April 16, Italy’s finance minister warned that US dollar-based stablecoins are a big risk to other economies.
Others are working on their own versions. In Abu Dhabi, three large firms are joining to launch a dirham-pegged stablecoin. They are waiting for approval from UAE regulators.
More users are also interested in stablecoins tied to other currencies. However, there is still low liquidity for these coins compared to dollar-backed ones.
Why Developing Countries Matter
The Sygnum report says many people in developing countries want US dollars. Their local money is losing value due to inflation. Dollar-backed stablecoins might give them a safer option.
Katalin Tischhauser of Sygnum says dollar stablecoins could help support the dollar globally, especially if more people use them in countries with weak currencies.
BRICS and a Multi-Currency World
The BRICS group—made up of 10 countries—is working to reduce use of the dollar in trade. They want a system that uses many fiat currencies, not just the dollar, for global payments.
That could mean more competition for the dollar, even as the US pushes stablecoins to stay ahead.
Source: cointelegraph.com
