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A Stablecoin Revolution? Why the U.S. Treasury Market May Be the Biggest Winner

The Biden-era crypto agenda has taken a new turn under President Donald Trump, with a strong push toward regulatory clarity around stablecoins. Leading the charge is David Sacks, Trump’s top advisor on cryptocurrency and AI policy, who claims the stablecoin legislation now advancing through the Senate could be transformative for the U.S. economy.

According to Sacks, providing a structured legal framework for stablecoins could generate trillions of dollars in fresh demand for U.S. Treasuries in the near future. “There’s already over $200 billion in stablecoins globally — they’re just operating without regulation. If we codify the rules, we can unlock unprecedented levels of capital flow into Treasury markets,” he told CNBC’s Closing Bell Overtime.

The GENIUS Act Clears a Major Hurdle

The legislation in question, the GENIUS Act, is designed to regulate the issuance and operation of stablecoins — digital tokens pegged to real-world assets such as the U.S. dollar. This week, the bill passed a key procedural vote in the Senate, with 15 Democratic senators joining Republicans to cross the filibuster threshold.

That milestone places the bill within striking distance of full approval. “We now have every expectation that it’s going to pass,” Sacks said.

Stablecoins: A Payment Rail for the Future

Unlike volatile cryptocurrencies like Bitcoin, stablecoins are typically tied 1:1 to fiat currencies and are increasingly being used for cross-border payments, remittances, and decentralized finance (DeFi) applications. Global stablecoin transaction volume hit $28 trillion in 2023, according to Deutsche Bank — a figure that outpaced Visa and Mastercard combined.

Tether (USDT), the dominant stablecoin, currently controls over 60% of the global market and is banked by Cantor Fitzgerald in the United States. With other stablecoin providers entering the scene, the competition — and regulatory need — has grown urgent.

“Stablecoins offer a faster, cheaper, and smoother payment rail,” Sacks explained. “And they reinforce the dollar’s dominance in digital transactions globally.”

Trillions at Stake for Treasuries

Sacks framed the potential impact of the GENIUS Act as not only a tech innovation but also a national economic advantage. By creating a regulated market for stablecoins backed by U.S. Treasury securities and dollar reserves, the legislation could create a massive new buyer base for government debt — at a time when Treasury demand is under pressure.

This demand could come from both domestic and foreign holders of stablecoins, especially institutions and sovereign funds that require legal certainty and transparency.

Conflict of Interest Concerns

Still, the path forward is not without controversy.

Ethics watchdogs and Democratic lawmakers have flagged potential conflicts of interest involving the Trump family’s direct participation in the crypto sector. Trump and his relatives have financial stakes in World Liberty Financial, which recently launched USD1, a stablecoin backed by dollar reserves and Treasuries.

Notably, Abu Dhabi-based MGX Investment Fund committed $2 billion to USD1 on Binance, marking the largest single crypto investment in the exchange’s history. This funding was announced just days before the Senate vote, raising concerns about insider influence.

David Sacks, for his part, disclosed that he liquidated $200 million in crypto assets prior to assuming his White House role — but critics argue that the broader Trump family remains deeply entangled.

Political Wrangling Could Derail Final Passage

While momentum is clearly building, the bill still faces hurdles. Republican Senator Josh Hawley recently inserted a provision capping credit card late fees — a measure that could alienate banking industry allies and stall the bill’s passage.

Banking lobbyists have already expressed unease, seeing the amendment as a “poison pill” that could unravel bipartisan consensus.

Final Thoughts: A Tipping Point for U.S. Crypto Regulation?

Despite the lingering uncertainty, one thing is clear: stablecoins are no longer a fringe concept. With over $200 billion already in circulation and transaction volume exceeding that of legacy payment giants, their influence on the financial system is only set to grow.

If the GENIUS Act becomes law, it may mark the beginning of a new era — one where stablecoins help fund the U.S. government, digitize the dollar, and reshape the global financial landscape.

Whether that future can unfold without political scandal remains to be seen.