U.S. Treasury Secretary Scott Bessent recently made the bold claim that stablecoins could reinforce the dominance of the USD, countering criticisms that view cryptocurrency as a threat to U.S. monetary supremacy. This statement comes amid President Trump's urging for Congress to expedite the passage of a significant cryptocurrency bill.
Cryptocurrency is not a threat, but a strategic tool
On Wednesday, Bessent tweeted: "Cryptocurrency is not a threat to the dollar," calling digital assets "one of the most important phenomena in the world today" that have been "overlooked by national governments for too long."
These comments were made as President Trump urged House lawmakers to quickly pass the GENIUS Act after the Senate approved the stablecoin framework on Tuesday. The Senate's approval of this legislation marks a reversal from last month, when the GENIUS Act failed in a procedural vote after crypto-supporting Democrats withdrew their support due to concerns over national security provisions and conflicts of interest from the Trump family.
Bessent condemned the previous failures, warning that "the world is watching while U.S. lawmakers hesitate" and urged Congress to "either step up and lead or witness digital asset innovation move abroad."
This act will establish federal rules for the issuance and trading of stablecoins – digital tokens typically pegged to the USD. "Stablecoins could eventually become one of the largest buyers of U.S. Treasury bonds or bills," the Treasury Secretary said in an interview with the New York Post, explaining how a person using a dollar-pegged stablecoin in Nigeria could transact without actually holding physical dollars. "I think it’s highly likely that cryptocurrency is indeed one of the things reinforcing the dollar's dominance," Bessent said, noting that the Biden administration has tried to "make it disappear" rather than embrace innovation.
Political tensions and concerns about conflicts of interest
Industry leaders welcomed the Senate's passage while acknowledging ongoing political tensions.
Ira Auerbach, head of Tandem at Offchain Labs, told #Decrypt that "the ongoing political divide over cryptocurrency is creating a market operating under a 'best guess' framework, and that is becoming unsustainable for an industry growing at a rapid pace." Auerbach pointed out that stablecoins "require a different legislative approach than digital assets like memecoins or trading tokens," stating that these are "separate issues" that speculative concerns "should not be allowed to hinder" payment infrastructure development.
However, concerns about conflicts of interest remain. Speaking with Decrypt, Alexander Urbelis, General Counsel at ENS Labs, warned that "the perceived entanglement of the GENIUS Act with the personal interests of the Trump family" could "undermine trust and credibility in the legislative process" and "fuel political theatrics" regarding the alleged risks of cryptocurrencies. Urbelis cautioned that in an era of "deep fakes amplified by social media platforms that have abandoned fact-checking," conspiracy theories regarding mismanagement of the weak dollar could "erode public trust" and lead to "global repercussions." #America
