The Trump administration is reportedly exploring an initiative to promote the use of dollar-backed stablecoins overseas. This effort aims to strengthen the US dollar's position as the world's reserve currency and increase demand for US Treasuries, which are commonly held as reserves by stablecoin issuers. The plan could involve joint ventures between federal agencies, such as the Treasury Department, State Department, and the US International Development Finance Corporation (DFC), and private-sector firms. This strategy builds on the argument that regulated stablecoins can expand dollar usage globally and channel reserves into short-term government securities.
This initiative follows the implementation of the GENIUS Act in July 2025, which established a federal regulatory framework for payment stablecoins. Treasury Secretary Scott Bessent has indicated that this act could solidify the dollar's reserve status and expand access to the dollar economy. Deputy Treasury Secretary Francis Brooke noted on September 22 that stablecoin issuers already hold nearly $200 billion in Treasury bills and other short-term securities, and this figure could increase as the GENIUS Act's rules are finalized. Major issuers like Tether hold substantial amounts, with Tether having roughly $141 billion in direct and indirect US Treasury exposure by March 2026.
The proposed overseas push is seen as a way to generate new demand for US debt, especially at a time when traditional foreign demand has been shifting and 10-year Treasury yields have topped 5.1%. Stablecoin growth has reportedly stalled, with Tether's USDT falling by nearly $3 billion to approximately $184 billion and Circle's USDC declining by a similar amount to about $72 billion in the first half of the year. An international campaign would leverage payments and remittances, uses less tied to the crypto trading cycle. However, the International Monetary Fund and the Bank for International Settlements have warned that wider adoption of dollar-pegged stablecoins could lead to capital flight from emerging economies and weaken domestic currencies.
While the plan remains a rumored proposal without specific details on firms, structure, funding, or timelines, it signifies a strategic interest in leveraging stablecoins for economic goals. The DFC, with an increased authority of $205 billion, could play a role in structuring future public-private investments, though no stablecoin-related projects have been approved by the DFC as of September 16. The administration's focus is on promoting privately issued dollar stablecoins rather than a Federal Reserve digital currency.
