The Trump administration is reportedly evaluating an initiative to promote US dollar-denominated stablecoins overseas in an effort to protect the greenback's status as the global reserve currency and drive international demand for US Treasuries.
Government Agencies and Joint Venture Plans
According to a Bloomberg report citing people familiar with the plans, several federal agencies could be involved in the strategy, including the Treasury Department, the State Department, and the US International Development Finance Corp. (DFC). One option under consideration is creating joint ventures between the federal government and private-sector firms to support stablecoin expansion abroad.
The DFC frequently partners with private enterprises to advance foreign policy goals and is headed by Ben Black, son of Apollo Global Management co-founder Leon Black. Apollo maintains a footprint in the digital asset sector through a partnership with Coinbase Asset Management that allows users to borrow against crypto assets.
The potential initiative follows President Donald Trump signing the GENIUS Act into law last year, establishing a federal framework requiring stablecoin issuers to back tokens with dollars and short-term Treasuries, an area previously detailed following Federal Reserve stablecoin oversight proposals. Treasury Secretary Scott Bessent has also advocated for dollar stablecoins, arguing their adoption reinforces the greenback's international position.
Market Dominance and International Competition
Data from DefiLlama shows the total stablecoin market cap at approximately $306 billion, with Tether (USDT) controlling nearly 60% of the market—coming as reports show Tether holds $114.96 billion in US Treasuries. Figures from RWA.xyz highlight the breakdown across peg currencies:
- Dollar-pegged stablecoins represent $305 billion of the total market cap.
- Euro-backed stablecoins account for nearly $805 million, while Brazilian real-pegged tokens hold almost $81 million.
- Recent net flows show positive momentum for dollar tokens, including $1.2 billion for USDC, $1.1 billion for USDT, $819 million for Ethena's USDe, and $355 million for Ripple's RLUSD.
- Visa Onchain Analytics recorded $6.4 trillion in total stablecoin transaction volume over the last 30 days across 1.7 billion transactions.
However, Washington's plan comes as rival economies build competing payment networks. China is utilizing its digital yuan in Project mBridge, while the European Central Bank advances its digital euro project. More than 12 euro stablecoins are fully authorized under the European Union's MiCA framework, including EURR—issued by Stripe-owned Bridge—which Revolut began rolling out to select customers in Denmark, Poland, and Portugal in August.
Why It Matters
By leveraging private stablecoin issuers as global distribution channels for short-term debt, Washington seeks to turn digital dollars into a primary instrument of economic influence. As central banks across Asia and Europe test alternative settlement rails like Project mBridge, incentivizing dollar-backed tokens ensures global digital commerce remains anchored to US Treasuries. The ultimate success of this initiative will depend on whether foreign jurisdictions accept American public-private stablecoin ventures or enforce localized protectionist rules.
