US Treasury Secretary Bessent: Crypto Is the Next Tool for Maintaining Dollar Dominance
- Core Viewpoint: US Treasury Secretary Bessent believes that digital assets are critical technological infrastructure for consolidating the dollar's global dominance. The United States will win in the digital asset technology stack, and stablecoins can strengthen the dollar's reach and demand in emerging markets.
- Key Elements:
- Bessent pointed out that the foundation of global reserve currency status is shifting from military strength to technological leadership. The divergence of US and Chinese technology ecosystems is forcing countries to choose between AI and semiconductor systems, and digital assets are one part of this.
- The Trump administration has pushed the GENIUS Act through, establishing a federal regulatory framework for stablecoins as part of the policy to bring crypto businesses back to the United States.
- More than 90% of stablecoins are backed by the US dollar, with issuers holding US government securities as reserves. Expanded adoption will increase demand for US Treasuries, making it an important funding source for the Treasury Department.
- Bessent rebutted the view that stablecoins merely replace existing dollars, arguing that they can reach new users in emerging markets and help protect savings from erosion by local currency depreciation.
- He expressed disappointment that Congress failed to pass the Clarity Act, but noted that the Treasury Department can work with the SEC and CFTC to advance the framework through regulatory actions, though regulatory rules lack legislative durability.
- Regarding debanking concerns, Bessent advocated that protection can be provided through regulatory best practices and guardrails to prevent crypto businesses from being cut off from financial services.
Original article from CoinDesk, author: Policy
Compiled by | SudiXia @Odaily
U.S. Treasury Secretary Scott Bessent said that as technology increasingly becomes a key source of American economic influence, digital assets can help cement the dollar's global dominance.
On Tuesday, speaking in conversation with Ripple CEO Brad Garlinghouse at the company's Swell conference, Bessent suggested that historically the power underpinning the world's reserve currency came from military strength, but that this power is increasingly shifting toward technological leadership.
"We will keep the military umbrella, but I think it is increasingly becoming a technology umbrella," Bessent said.
He noted that the technology ecosystems of the U.S. and China are accelerating their divergence, and that countries and companies alike face a choice: whose AI systems to adopt, whose semiconductor technology to adopt. Bessent said he views digital assets as part of this competition—what kind of financial infrastructure countries choose will affect how far the dollar can reach.
"I think digital assets will be no exception—we will win on the digital asset tech stack, and that will continue to reinforce the dollar," he said.
These remarks offer a broader rationale for the Trump administration's push to bring crypto firms back to the United States: digital assets are not just a financial market; they are part of the infrastructure that sustains American economic influence.
The Trump administration has already pushed the GENIUS Act through, establishing a federal regulatory framework for stablecoins. Stablecoins are a type of cryptocurrency designed to maintain a fixed value relative to fiat currencies such as the dollar.
Bessent believes that stablecoins can strengthen the dollar's position—in countries where the local currency faces inflation or severe value fluctuations, stablecoins make it easier for local residents to access dollars.
He said that more than 90% of stablecoins are backed by the dollar, and that stablecoin issuers often hold U.S. government securities as reserves. As adoption scales up, demand for these assets will also rise, creating another source of financing for the federal government.
"I think this will become an important funding source for the Treasury," Bessent said.
Opening New Markets
Some have suggested that stablecoins merely replace dollars that users already hold, but Bessent disagrees. His reasoning is that stablecoins can reach new users in emerging markets—those who want to protect their savings from erosion by local currency depreciation.
"I think we are opening up new markets around the world," he said.
However, the White House's broader push on crypto market regulation suffered a setback: Congress failed to pass the Clarity Act, a bill that would have established a federal framework for the entire industry.
Bessent called the failure disappointing but said the Treasury can work with regulators such as the SEC (U.S. Securities and Exchange Commission) and CFTC (U.S. Commodity Futures Trading Commission) to advance industry oversight through regulatory actions.
"At the Treasury, we have significant convening power," he said, calling the SEC and CFTC "excellent partners" that will jointly form a regulatory framework that other countries can follow.
These regulatory actions can provide crypto firms with clearer rules, but rules made by regulators do not have the same durability as legislation.
Bessent also responded to industry concerns about "debanking." The term refers to financial institutions cutting off services to crypto firms, sometimes allegedly due to regulatory pressure.
He said the Clarity Act could have prevented such practices from recurring, but argued that regulatory-level safeguards can still provide protection.
"I think we can establish regulatory best practices and guardrails to prevent this kind of thing from happening again," Bessent said.
