U.S. Treasury Secretary Scott Bessent has framed dollar-backed stablecoins as part of the United States’ competition for global technological and financial influence, arguing that digital assets could expand access to the dollar while creating additional demand for U.S. government debt.
Speaking with Ripple Chief Executive Officer Brad Garlinghouse at the company’s Swell conference, Bessent said reserve-currency power has traditionally followed military strength but is increasingly linked to technological leadership. The United States would retain its military role, he said, while extending what he described as a “technology umbrella” through areas including artificial intelligence, semiconductors and digital finance.
Bessent placed stablecoins within that strategic contest. Countries and companies are increasingly being pressed to select between U.S. and Chinese technology systems, he said, from AI models to semiconductor supply chains. Financial infrastructure is becoming part of the same choice, with dollar-based digital assets offering a way for U.S. currency to circulate through internet-native payment networks.
Stablecoins as a dollar distribution channel
Bessent argued that stablecoins can deliver dollar-denominated value to people in countries with high inflation, capital restrictions or rapidly depreciating local currencies. Stablecoins are blockchain-based tokens designed to maintain a fixed value, usually by referencing a fiat currency such as the U.S. dollar.
More than 90% of stablecoins are backed by the dollar, Bessent said during the discussion. That dominance means the sector has largely developed as an extension of the dollar system rather than as a rival monetary network, even though the tokens move on public blockchains and can be held outside traditional bank accounts.
His argument challenges the view that stablecoins mainly shift existing dollars from bank deposits or payment applications into crypto wallets. Bessent said they can reach people who previously had little practical access to dollar savings or dollar payment rails, particularly in emerging markets where households may seek protection from local-currency volatility.
The distinction has consequences for Treasury policy. If stablecoins become a widely used route to hold and transfer digital dollars abroad, their growth could reinforce the dollar’s international role without requiring users to open U.S. bank accounts or directly enter American financial markets.
That prospect also places reserve management at the center of the policy debate. Major stablecoin issuers typically hold liquid assets to support redemptions, including short-term U.S. government securities. Bessent said wider stablecoin use could therefore increase demand for Treasury bills and other federal debt instruments, providing another source of financing for the U.S. government.
A policy case tied to Treasury demand
The Treasury secretary’s remarks align digital-asset policy with a fiscal argument that has become more prominent as the stablecoin market expands. A dollar-backed token backed by short-dated government debt effectively links demand for on-chain dollars to demand for the securities used in its reserves.
Bessent described this reserve demand as an important financing channel for Treasury. The potential scale depends on whether stablecoins gain use beyond crypto trading and whether issuers maintain high-quality, liquid reserves. His comments nonetheless show the administration viewing compliant stablecoins as a tool that can support both dollar circulation and the market for federal debt.
The administration has pursued policies intended to bring more crypto businesses and stablecoin activity into the United States, including the GENIUS Act’s federal stablecoin framework, according to the material provided. The approach favors a regulated version of the industry in which dollar-backed issuers operate under clearer requirements and maintain domestic connections to the U.S. financial system.
That is a different policy emphasis from treating stablecoins mainly as a consumer-protection problem or as a threat to bank deposits. Bessent presented them as financial infrastructure that could give the United States a larger role in the design of cross-border digital payments.
Congress remains a limiting factor
Bessent also acknowledged that the administration does not yet have every legislative tool it wants. He referred to Congress’s failure to pass the Clarity Act, a proposed federal framework for the wider crypto industry.
Without that legislation, Treasury could work with the Securities and Exchange Commission and Commodity Futures Trading Commission on agency-led measures, Bessent said. Treasury has authority to convene regulators and coordinate policy, potentially helping establish standards that other jurisdictions may follow.
Agency action can create operational guidance and enforcement priorities, but Bessent noted that rules built through regulators do not carry the same permanence as legislation. A statutory framework would give crypto firms, banks and stablecoin issuers clearer long-term obligations and would be less vulnerable to policy reversals under a future administration.
The unresolved question is how far agencies can go while Congress remains divided over market structure, oversight boundaries and the treatment of decentralized financial products. Stablecoins may have a more direct route to federal rules because their reserves, redemption practices and links to the banking system provide clearer points for supervision than many other crypto assets.
Debanking concerns remain in focus
Bessent also addressed complaints from crypto businesses about “debanking,” in which financial institutions restrict or terminate access to accounts and payment services. Industry participants have argued that firms have sometimes been excluded from banking relationships because of regulatory pressure or broad compliance concerns rather than specific misconduct.
Bessent said regulators could establish best practices and guardrails intended to reduce the risk of firms being denied financial services without a clear basis. Such protections would matter for companies that need ordinary banking access to pay employees, convert customer funds and maintain reserves.
His comments suggest the administration’s crypto policy is moving on two tracks: creating rules for dollar-backed digital money while trying to ensure compliant businesses can participate in the conventional financial system. The approach would give stablecoin issuers and other regulated crypto firms a more formal place within U.S. financial infrastructure, while tying that access to supervision, reserve standards and regulatory coordination.
Want deeper context on regulation and dollar-pegged tokens? Read why the GENIUS Act could be the turning point for stablecoins next.
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