More Than 90% of Stablecoins Are Backed by the Dollar, Bessent Says
Key Facts
U.S. Treasury Secretary Scott Bessent said the United States would win in the digital asset ecosystem, adding that this would continue to strengthen the dollar, according to a CoinDesk report published on October 27. Bessent linked the historical standing of reserve currencies to military strength, but said the source of influence was shifting increasingly toward technology. "We will maintain our military umbrella, but I think it is turning more and more into a technological umbrella." His remarks covered digital assets and stablecoins, not just cryptocurrencies generally. His comments cast dollar-linked stablecoins as part of a broader effort to expand the U.S. currency’s use in payments and reserves.
Bessent said more than 90% of stablecoins are backed by the dollar, and that their issuers often hold U.S. government securities in their reserves. He said the growth of these currencies could increase demand for government assets, making them an important source of financing for the U.S. Treasury. "I think they will be an important source of Treasury financing." Under this view, wider use of a dollar-linked digital payment method could also broaden the pool of demand for U.S. debt instruments. He also said these currencies could provide access to the dollar for users in countries facing inflation or sharp volatility in their local currencies. He added that they could reach new users in emerging markets seeking to protect their savings from currency depreciation.
Federal Reserve data show that the dollar’s share of disclosed global foreign exchange reserves was 57.8% in 2024, compared with 71.5% in 2001. The total market value of dollar-linked stablecoins was also about $220 billion in April 2025, according to the Fed’s data. The Fed said their use appears to serve as an alternative to U.S. banknotes in some developing countries. In September 2026, the Fed said a permitted payment stablecoin must be backed by relatively safe reserve assets, such as short-term U.S. Treasury bills and bank deposits. Those requirements align with Bessent’s remarks about issuers holding government securities as reserves, while placing his proposal for stablecoins within a broader debate over the reach of the dollar.
On the legislative front, the report said Congress passed the GENIUS Act, which established a federal framework for regulating stablecoins. The Treasury Department announced on August 17, 2026, that it had begun the process of writing rules to implement the law, and Bessent said its implementation aims to provide regulatory certainty and entrench the dollar’s role as a global reserve currency. The department set January 18, 2027, as the expected date for the law to take effect. Under the law, issuing a payment stablecoin in the United States generally requires a federal or state license. That places the potential expansion of stablecoins within specific regulatory requirements, alongside Bessent’s wager on their role in supporting demand for the dollar and Treasury securities.
By contrast, the CLARITY bill, which would have established a federal framework for the digital asset market, stalled, and Bessent described its failure to pass as disappointing. He said the Treasury Department could work with the Securities and Exchange Commission and the Commodity Futures Trading Commission to advance oversight of the sector through agency action. But he noted that rules issued by agencies would not have the permanence provided by legislation. Bessent also addressed concerns that financial institutions were cutting off services to digital asset companies, saying regulators could put safeguards and practices in place to prevent it from happening again. "I think we can put in place the best regulatory practices and safeguards that will prevent this from happening again."
The remarks came on a day when the Federal Reserve made a separate monetary policy decision. On October 28, the committee kept the target range for the federal funds rate at 3.75% to 4%, with the decision passed by a vote of 10 to 2. Lisa Cook and Beth Hammack voted for a quarter-percentage-point increase. The Fed said inflation remained elevated and that the accumulation of more information would help the committee determine the appropriate policy to return it to its 2% target. In separate economic data, new orders for U.S.-manufactured durable goods rose by $6.3 billion, or 1.8%, to $345.4 billion in September, following a 0.1% increase in August. Neither the data nor the interest rate decision linked Bessent’s remarks to a specific economic policy.
Details of the durable goods report showed that orders excluding transportation equipment rose 0.5% in September, while orders excluding defense increased 2.2%. Transportation equipment led the increase, with orders rising 4.6%, or $5.2 billion, to $119.8 billion. September’s reading followed a modest increase in the previous month, while the figures highlight differing performance among the report’s components during the period. The next regulatory milestone linked to Bessent’s remarks remains the expected date for the GENIUS Act to take effect on January 18, 2027. The broader oversight path for the digital asset market depends on action by the agencies Bessent named, after the CLARITY bill stalled in Congress.