The Trump administration clearly views stablecoins as a tool to enhance the strength of the dollar and create demand for U.S. Treasury bonds, while opposing any central bank digital currency (CBDC) concepts that may challenge the dollar's status.
On July 19, according to CCTV, local time on July 18, U.S. President Trump officially signed the 'Guidance and Establishment of the U.S. Stablecoin National Innovation Act' (referred to as the 'Genius Act') at the White House, marking the implementation phase of U.S. stablecoin regulatory legislation.
Trump stated at the signing ceremony: "I promised that we would bring back America's freedom and leadership, making America the cryptocurrency capital of the world. Under my leadership, we have achieved this."
The signing of this bill is expected to clear obstacles for the issuance and circulation of digital currencies—stablecoins—pegged to stable assets like the dollar, thereby enhancing market trust and driving industry growth. Trump emphasized that stablecoins represent a "revolution" in the fintech sector.
Meanwhile, Trump reiterated that he would not allow the dollar's status to decline and promised to sign a bill prohibiting the emergence of central bank digital currencies (CBDCs). This year, the dollar index has fallen from a high of 110 to around 98, a drop of over 10%.
Trump: The dollar's hegemony cannot be shaken.
In promoting cryptocurrency regulatory legislation, the core logic of the Trump administration is to use stablecoins issued by the private sector to strengthen, rather than replace, the dollar.
Trump stated that cryptocurrencies are beneficial for both the dollar and the nation, and the 'Genius Act' is a 'massive' validation for crypto digital currencies.
In response to the dollar's weak performance this year, Trump emphasized: "We will not allow the dollar to decline. If the dollar loses its status as a reserve currency, it will be like the U.S. losing a war."
He emphasized his determination to defend the dollar's status, stating: "The U.S. will never have a central bank digital currency (CBDC) issued by the Federal Reserve, and I will soon sign a legislative proposal to form a CBDC ban."
Analysts believe that Trump's series of statements clearly delineates the boundaries: supporting private sector innovations linked to the dollar and backed by dollar assets, while firmly opposing any official digital currency that may reshape the power of currency issuance.
The logic behind this strategy is that as global users increasingly use stablecoins pegged 1:1 to the dollar for transactions or transfers, the issuers must buy and hold corresponding amounts of dollar assets (such as U.S. Treasury bonds) as reserves.
Trump's AI and cryptocurrency chief David Sacks corroborated this point, noting that the 'Genius Act' will directly "create demand for investment/holding of U.S. Treasury bonds," thereby consolidating the dollar's global position in the digital age.
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