U.S. weighs promoting dollar stablecoins abroad
The Trump administration is reportedly considering a plan to promote dollar-backed stablecoins abroad via joint ventures between private firms and agencies including the Treasury, the State Department and the DFC, Bloomberg reported. The plan could raise demand for US Treasurys because issuers commonly hold short-dated Treasurys as reserves, a dynamic reinforced by last year’s GENIUS Act and current Treasury rulemaking. The effort faces political and geopolitical constraints after the Senate failed to invoke cloture on the CLARITY Act, while China and the ECB advance their own digital currency initiatives.
Wider stablecoin use could raise demand for US Treasurys
Context
Lawmakers passed the GENIUS Act and the Treasury is writing rules for payment stablecoins. Other countries are testing digital money, and Congress recently failed to advance the CLARITY Act.
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