Treasury Secretary Scott Bessent has publicly endorsed legislation requiring stablecoins to be fully backed by highly liquid assets such as U.S. dollars and short-term Treasury bills (T-bills). As Congress progresses toward a vote on the GENIUS Act, Bessent’s support signals growing momentum for formal stablecoin regulation intended to integrate digital assets more closely into the traditional financial system.
Bessent emphasized that regulated stablecoins could strengthen demand for U.S. government debt, deepen the Treasury market, and reinforce the dollar's global reserve status. Stablecoin issuers currently hold tens of billions in short-term Treasuries, and formal rules could substantially expand these holdings, potentially rivaling major foreign investors. However, some analysts warn that stablecoin growth might introduce volatility to the Treasury market and complicate monetary policy if large-scale redemptions occur.
The GENIUS Act outlines strict reserve requirements, transparency, and risk management practices for issuers, and mandates annual audits for those above $50 billion in market capitalization. The bill also regulates foreign-issued stablecoins operating in the U.S. market.
Bessent projects a $2 trillion market cap for USD-backed stablecoins by 2028, contingent on the passage of strong regulatory frameworks. He views stablecoins as key to preserving U.S. dollar dominance globally and bridging traditional finance with digital assets, fostering both financial stability and innovation.
The legislation has bipartisan support and backing from figures including former President Donald Trump. Meanwhile, institutional interest is rising, exemplified by fintech firm Circle’s successful public debut and Bank of America’s reported development of a USD-backed stablecoin, signaling growing traditional finance involvement in blockchain technology.