The U.S. government’s efforts to maintain the dollar’s dominance through stablecoin adoption could indirectly benefit Bitcoin.
The U.S. government’s efforts to maintain the dollar’s dominance through stablecoin adoption could indirectly benefit Bitcoin. Speaking at the White House Crypto Summit on March 7, U.S. Treasury Secretary Scott Bessent emphasized the administration’s commitment to using stablecoins to secure the dollar’s status as the world’s leading reserve currency. “We are going to put a lot of thought into the stablecoin regime, and as President Trump has directed, we are going to keep the U.S. [dollar] the dominant reserve currency in the world,” Bessent said. He also reiterated the administration’s stance on rolling back previous Internal Revenue Service guidance and regulatory measures seen as harmful to the crypto industry.
Shortly before the summit, President Trump signed an executive order establishing a Bitcoin reserve using cryptocurrency seized in government criminal cases. While the order does not involve direct government purchases of Bitcoin, it signals a shift in the administration’s approach to digital assets. Meanwhile, two major bills—the Stablecoin Bill and the Market Structure Bill—are pending congressional approval. If passed, they could provide more regulatory clarity for the crypto industry.
The growing use of stablecoins is also driving capital into Bitcoin. Tether, the issuer of the largest stablecoin, USDT, has committed to investing 15% of its net profits into Bitcoin. The company posted a record $4.5 billion profit in the first quarter of 2024, with $3.52 billion coming from Bitcoin and gold holdings. Tether’s Bitcoin wallet, labeled “bc1q,” holds more than $6.8 billion in BTC, making it one of the largest Bitcoin holders globally. Data from BitInfoCharts shows that Tether’s Bitcoin investments contributed $5 billion in profits in 2024, out of a total $13 billion annual profit.
The growing relationship between stablecoins and Bitcoin is also evident in market dynamics. As more stablecoins circulate on exchanges, Bitcoin liquidity increases, making it easier for investors to buy and sell the digital asset. Omri Hanover, general manager at blockchain launchpad Gems Trade, noted that U.S. policies supporting stablecoins and Bitcoin could attract institutional capital. “If Trump’s policy strengthens U.S. financial dominance, Europe’s reluctance and ‘wait-and-see’ approach could weaken its economic leverage,” he said. “This divide creates two market realities: U.S. accelerates Bitcoin’s institutional adoption, drawing capital; and EU prioritizes compliance, risking a capital shift to U.S. markets.”
With stablecoin issuers generating significant profits and reinvesting in Bitcoin, the cryptocurrency’s position as a store of value is becoming more established. However, without regulatory clarity, the long-term impact of these policies remains uncertain. Congress has yet to pass key legislation that could shape the future of the U.S. crypto industry.
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