Trump uses crypto as a weapon: dollar dominance in danger!

Trump uses crypto as a weapon: dollar dominance in danger!

The Trump administration is pursuing an aggressive strategy to secure the dominance of the US dollar through crypto and stablecoin technologies. Treasury Secretary Scott Bessent has emphasized that stablecoins will be used as a strategic weapon to preserve the dollar's role as the world's reserve currency. Bessent believes that stablecoins could become the largest buyers of US government bonds in the coming years. According to estimates, the US dollar-pegged stablecoin market could exceed $2 trillion within three years, while the current market value is already around $240 billion, with Tether (USDT) as the largest player.

With the passage of the GENIUS Act in the US Senate, which sets clear rules for the stablecoin market, Trump is pushing for rapid implementation of these legislative initiatives. The bill, which is before the House of Representatives, requires stablecoin issuers to maintain reserves of at least 1:1, which is intended to contribute to market stability. Trump sees stablecoins as an opportunity to secure the US's lead in innovation and plans to sign a final proposal this summer. Bessent also criticized the Biden administration, which he said has hindered crypto innovation.

The Path to Dollar Dominance

The use of stablecoins could not only transform the way money is stored and moved across borders, but also serve as a gateway to US dollars in economically unstable countries. Many users worldwide could benefit from this technology without the need for a bank account. Scott Bessent highlighted that over 99.8% of the current stablecoin market is already denominated in dollars. This highlights the strategic importance of stablecoins in financing the US government, which currently manages $35.8 trillion in federal debt.

Another important aspect of this strategy is the creation of conditions that secure the dollar as the dominant currency in the global financial system. Experts predict that the stablecoin market could grow into a trillion-dollar industry within a few years. Access to dollar stablecoins could increase demand for short-term US debt, thereby supporting the US budget. It was also noted that stablecoins could be used as a potential tool to circumvent US sanctions and traditional payment systems.

Future outlook

Trump and his administration are positioning themselves with this strategy to promote a new era of digital finance. The GENIUS Act could lay the foundation for a new dollar-based system on blockchains, supporting the spread of the dollar far beyond banks and national borders. Bessent has expressed the belief that crypto will play a crucial role in the future of dollar-based finance, further bolstering US efforts to solidify its financial influence on the global stage.

Overall, the Trump administration views stablecoins as a central pillar of the US strategy to ensure the dollar's dominance while creating opportunities for innovation and technological advancement. The coming months will be crucial as legislation advances and the impact of these policies on the global market is monitored.

For more information on this topic, read reports from Newsbit and Forbes.