US Weighs Global Dollar Stablecoin Plan Amid Warnings for Emerging Markets

The Trump administration is reportedly weighing joint ventures with private companies to spread dollar backed stablecoins abroad. The goal is to strengthen the dollar’s role as the top reserve currency and create fresh demand for US Treasury notes. The Treasury Department, the State Department and the US International Development Finance Corporation could all play a part.

How Dollar Stablecoins Work

Stablecoins are blockchain tokens pegged to a reference like the dollar, and they are widely used for crypto trading and cross-border payments. USDT and USDC are pegged 1:1 and make up almost 90% of the $292.49 billion market. Under the GENIUS Act, issuers must hold reserves in dollars and short-term Treasuries.

Stablecoins and US Treasury Demand

Issuers now hold close to $200 billion in US debt, placing them among the top 20 holders and ahead of several major nations. Treasury Secretary Scott Bessent has called stablecoins a tool for dollar dominance, noting the dollar sits on nearly 90% of foreign exchange transactions.

Stablecoin Risks for Emerging Economies

Because stablecoins move over blockchains, they can bypass banks and make it harder for central banks to track money flows. Widespread use could pressure local currencies. The IMF and the Bank for International Settlements have both warned that these tokens may speed capital flight from emerging economies during stress.