US Embraces Dollar-Pegged Stablecoins as Strategic Asset to Revive Dollar Dominance
Digital asset banking group Sygnum reports that 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. To accelerate this goal, the current administration is actively promoting the growth of the stablecoin market and urging Congress to pass related legislation.
The findings stem from Sygnum’s latest assessment of the dollar’s global standing and the US government’s efforts to preserve its supremacy.
Degraded Demand, Strategic Stablecoins
US President Donald Trump and key administration figures, including Treasury Secretary Scott Bessent and White House “Crypto and AI Czar” David Sacks, are advocating for the swift passage of the “GENIUS Act.” This proposed legislation aims to regulate stablecoins and their issuers in the United States. The bill passed the Senate on June 17th and is currently under consideration in the House of Representatives.
Global Resistance to Dollar Dominance in Stablecoins
Despite Washington’s push, resistance to dollar-pegged stablecoins is growing internationally. Finance Minister Giorgia Meloni of Italy issued a stark warning on April 16th, cautioning that US dollar stablecoins pose a greater systemic risk than traditional tariffs, adding that their appeal should not be underestimated.
Fatima Deanna Markova, Fireblocks’ policy chief, told Cointelegraph that while demand exists for non-dollar stablecoins, they currently face limited liquidity. Sygnum has partnered with Fireblocks on an instant settlement network facilitating stablecoin transactions.
Adding to the trend away from dollar dominance, AD Capital, along with three other major entities in Abu Dhabi, are collaborating to launch a UAE dirham-pegged stablecoin, pending approval from UAE regulators.
Fuelled by Retail Demand in Developing Nations
The Sygnum report identifies a key driver for dollar demand: rising inflation and currency depreciation affecting retail consumers in developing countries.
“The US administration believes that dollar denominated stablecoins can serve this retail demand, thereby reversing the dollar’s eroding reserve currency status,” according to the report.
In defense of this strategic view, Katalin Tischhauser, head of research at Sygnum (note: Sygnum’s report cites the view, not researcher comment here – corrected below), explained:
“The dominance of dollar stablecoins across the crypto industry theoretically reinforces the dollar’s monetary dominance if the blockchain-based, decentralised economy expands substantially. However, I am not sure there’s a compelling case beyond this, unless retail use significantly accelerates in developing countries—especially with potential incentives.”
Furthermore, opposition is emerging from the BRICS alliance (Brazil, Russia, India, China, South Africa, and potentially others), which actively seeks to reduce reliance on the US dollar. Sygnum notes the bloc is promoting a multipolar financial system favoring multiple fiat currencies for international trade and settlement.
