Bessent Says Dollar-Backed Stablecoins Account for More Than 90% of the Market
Key Facts
U.S. Treasury Secretary Scott Bessent said digital assets could strengthen the dollar’s global dominance as technology becomes an increasingly important source of U.S. economic influence. Bessent made the remarks Tuesday at the Ripple Swell conference, in a discussion with the company’s chief executive, Brad Garlinghouse. The U.S. official cast digital assets as part of a broader competition over the technological and financial infrastructure used by countries and companies. He said the power that historically supported reserve currencies was tied to military strength, but was increasingly shifting toward technological leadership. He added that countries’ choice of financial systems could affect the dollar’s global reach.
Bessent linked that competition to the widening gap between the U.S. and Chinese technology ecosystems. Countries and companies, he said, face choices over which artificial intelligence systems and semiconductor technologies to adopt. He said digital assets would enter the same competition because the infrastructure underpinning financial transactions could become part of countries’ technology choices. “I think digital assets will be no different, and we will win in the digital asset ecosystem, and that will continue to strengthen the dollar,” he said. The argument places cryptocurrencies in the context of competition for economic influence, rather than treating them merely as payment tools or investment assets.
Bessent singled out stablecoins as potentially expanding the use of the dollar, saying they could provide access to the U.S. currency in countries where local currencies face inflation or sharp volatility. He said more than 90% of stablecoins are backed by the dollar and that their issuers often hold U.S. government securities as part of their reserves. The GENIUS Act, introduced by the Trump administration, established a federal regulatory framework for these coins, which are designed to maintain a stable value against fiat currencies such as the dollar. That links growth in stablecoin use to demand for the reserve assets backing them. Bessent said when the law was signed in July 2025 that the technology could expand access to the dollar economy and increase demand for U.S. Treasury securities.
Federal Reserve data show the dollar accounted for 58% of disclosed global official foreign exchange reserves in 2024, down from a peak of 72% in 2001. In August 2026, the International Monetary Fund estimated the market value of stablecoins at about $300 billion and said nearly 99% were denominated in dollars. An IMF working paper estimated total stablecoin flows at about $21.4 trillion across 188 countries during 2018–2025. Three-quarters of holdings were concentrated in emerging markets and developing economies, according to the paper published on 2 October 2026. The figures highlight the spread of use beyond advanced economies and the link Bessent draws between digital adoption and the dollar’s status.
Bessent said wider stablecoin adoption could increase demand for the assets held by their issuers, providing an additional source of financing for the federal government. He pushed back against the argument that the coins would replace dollars already in circulation, saying they could reach new users in emerging markets seeking to protect their savings from declines in the value of local currencies. But an IMF study also found a link between their use and pressure on local currencies. Stablecoin activity rose by about 30% in the six months after restrictions on capital outflows were imposed, the study found. Holdings also increased by about 75% over a year when currency crises occurred.
On the regulatory front, the broader CLARITY bill stalled after Congress failed to pass it; it would have established a federal framework for the digital asset industry. The Senate Banking Committee approved a revised version of the bill on 1 June 2026, but the Senate failed to pass a motion to begin considering it on 15 September, according to a filing with the U.S. Securities and Exchange Commission. Bessent described the bill’s failure as disappointing and said the Treasury Department could work with the SEC and the Commodity Futures Trading Commission to advance oversight through agency action. “I think we can put in place best regulatory practices and safeguards to prevent this from happening again,” he added. He was referring to concerns that financial institutions could cut off services to digital asset companies, while agency action remains the path Bessent pointed to after the legislative setback.