Key Takeaways
- Trump administration plans to regulate and bring stablecoins onshore.
- Stablecoins are a $227 billion market, with USDT holding over 60% share.
- An executive order signed on Jan. 23 supports US dollar-backed stablecoins while banning CBDCs.
The Trump administration is moving to regulate stablecoins and bring their market onshore, according to David Sacks, the administration’s crypto czar.
Speaking on CNBC’s Closing Bell Over Time on Feb. 4, Sacks emphasized the importance of stablecoins in extending the global dominance of the US dollar.
Current market status
Sacks stated:
The stablecoin market has already taken off but mostly offshore.
He added that the US wants to…
… bring that innovation onshore.
The stablecoin market is currently valued at $227 billion, with 97% of it comprising US-pegged stablecoins like Tether’s USDT, which alone makes up over 60% of the market, according to CoinGecko.
Economic impact
Sacks pointed out that stablecoins could generate “potentially trillions of dollars” in new demand for US Treasurys, strengthening the country’s financial position by supporting its debt and lowering long-term interest rates.
Executive order details
The White House reinforced its commitment to supporting dollar-backed stablecoins in an executive order signed by Trump on Jan. 23.
The order also prohibited central bank digital currencies (CBDCs), ensuring the focus remains on stablecoins as digital dollars.
Regulatory outlook
The administration aims to introduce legislation for stablecoin issuance, though some, like Circle’s USDC, are already regulated within the US.
Meanwhile, Tether’s USDT, which dominates the market, may face additional scrutiny as the administration pushes for an onshore shift.
