US President Donald Trump and members of his administration have pushed for the passing of the GENIUS Act, which would regulate stablecoins in the US.
The United States views dollar-pegged stablecoins as a tool to help reverse the decline of the dollar’s status as a global reserve currency, according to a new report from digital asset banking group Sygnum. To accelerate that goal, the current administration is encouraging the growth of the stablecoin market and urging Congress to pass related legislation.
The insights come from Sygnum’s latest report examining the dollar’s standing as a reserve currency and the US government’s efforts to preserve that.
US President Donald Trump and key members of his administration, including Treasury Secretary Scott Bessent and AI and David Sacks, Trump’s “Crypto and AI Czar,” who leads the President’s Council of Advisors on Science and Technology, are pushing for the swift passing of the GENIUS Act, which regulates stablecoins and their issuers in the United States. The Act passed the Senate on June 17 and is currently in the House of Representatives.
Global alternative to US dollar stablecoin emerges
While the US government is pushing dollar-pegged stablecoins, resistance is growing worldwide. On April 16, Italy’s finance minister warned that US dollar stablecoins pose a greater risk than tariffs and that the appeal of these stablecoins should not be underestimated.
Fireblocks policy chief Dea Markova told Cointelegraph that there is growing demand for stablecoins not pegged to the US dollar, despite the limited liquidity for these coins at the moment. Sygnum has partnered with Fireblocks for an instant settlement network that includes stablecoin transactions.
Three major entities in Abu Dhabi have teamed up to launch a dirham-pegged stablecoin, pending approval from UAE regulators.
Related: Crypto bank Sygnum hits unicorn status with new $58M raise
Demand for US dollars is coming from developing countries
The Sygnum report cites demand for US dollars coming from retail in developing countries, which face rising inflation and depreciating local currency.
“The US administration believes that dollar denominated stablecoins can serve this demand and reverse the dollar’s eroding reserve currency status,” notes the report.
Katalin Tischhauser, head of research at Sygnum, told Cointelegraph, “The dominance of dollar stablecoins across the crypto industry can help reinforce the dollar’s monetary dominance if the blockchain-based, decentralised economy expands substantially.” He added:
“However, I am not sure that there is a compelling case for stablecoins moving the needle on dollar dominance beyond that, unless retail use accelerates in developing countries on the back of incentives.”
In addition, resistance may come from BRICS, a bloc of 10 countries seeking to reduce reliance on the US dollar. According to Sygnum, the group is advancing a multipolar financial system that favors using multiple fiat currencies for cross-border trade and settlement, rather than a single global reserve currency.
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