The US push to maintain the dollar’s global dominance through stablecoin adoption could have unintended benefits for Bitcoin as it emerges as a potential national reserve asset.
During the White House Crypto Summit on March 7, US Treasury Secretary Scott Bessent said the American government would use stablecoins to ensure the US dollar remains the world’s global reserve currency.
“We are going to put a lot of thought into the stablecoin regime, and as President Trump has directed, we are going to keep the US [dollar] the dominant reserve currency in the world,” Bessent said.
The treasury secretary also repeated the Trump administration’s promise to end the war on crypto and committed to rolling back previous Internal Revenue Service guidance and punitive regulatory measures.
President Trump delivers address to White House Crypto Summit. Source: The Associated Press
The comments came just before Trump signed an executive order establishing a Bitcoin (BTC) reserve using cryptocurrency forfeited in government criminal cases. While the order does not involve direct federal Bitcoin purchases, it represents a shift in how the government views the cryptocurrency.
Bitcoin may benefit from the growing stablecoin adoption and push for more regulatory clarity, according to Omri Hanover, general manager at the Gems Trade blockchain launchpad.
“If Trump’s policy strengthens US financial dominance, Europe’s reluctance and ‘wait-and-see’ approach could weaken its economic leverage,” he told Cointelegraph, adding:
“This divide creates two market realities: US accelerates Bitcoin’s institutional adoption, drawing capital; and EU prioritizes compliance, risking a capital shift to US markets.”
Meanwhile, two major bills await congressional approval: the Stablecoin bill and the Market Structure bill, which aim to help lift the regulatory uncertainty around the US crypto industry.
Meanwhile, pro-crypto lawmakers have focused on two major legislative priorities — stablecoins and general market structure clarity — which would help lift the regulatory uncertainty around the US crypto industry. However, no related bills have yet been passed by Congress.
Related: US Bitcoin reserve marks ‘real step’ toward global financial integration
Growing stablecoin issuer profits may flow into Bitcoin investments
The growing profits of stablecoin issuers could contribute to Bitcoin investments, further strengthening its status as a store of value.
Tether, the issuer of the world’s largest stablecoin, USDt (USDT), said it would invest 15% of its net profit into Bitcoin to diversify its backing assets.
Tether’s Bitcoin holdings proved to be lucrative when the firm posted a record $4.5 billion profit for the first quarter of 2024.
Approximately $1 billion stemmed from operating profits derived from US Treasury holdings, while the remaining $3.52 billion comprised the market-to-market gains in the firm’s Bitcoin holdings and gold positions.
Tether’s financial reserves, Q1 2024. Source: Tether
Related: Paolo Ardoino: Competitors and politicians intend to ‘kill Tether’
Tether’s “bc1q” address currently holds over $6.8 billion worth of Bitcoin, making it the world’s sixth-largest holder, BitInfoCharts data shows.
Tether’s Bitcoin holdings earned the company $5 billion in profits during 2024, out of its total $13 billion yearly profit, Cointelegraph reported on Jan. 31.
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