Stablecoin demand for $2 trillion in U.S. Treasury bonds = Treasury Secretary Bessent

## "Cryptocurrency is a priority for the Trump administration"

U.S. Treasury Secretary Scott Bessen commented on the Trump administration's efforts regarding cryptocurrencies and the impact of stablecoins on the United States on the 23rd. This statement was made during an interview with Bloomberg.

When asked what impact the promotion of stablecoins would have on the demand for the US dollar and US Treasury bonds, Mr. Bessent replied as follows.

The Trump administration has made digital assets a priority. Previous administrations suppressed this and pushed it overseas.

We want to provide the highest regulatory standards and anti-money laundering measures for digital assets, especially stablecoins.

This could generate demand for U.S. Treasuries and Treasury bills of 2 trillion dollars (approximately 285 trillion yen) even for just short-term estimates.

Mr. Bessent also continued that the current demand for U.S. bonds is about 300 billion dollars (approximately 43 trillion yen). This would estimate that demand is expected to swell by about 6.7 times.

Many stablecoins pegged to the US dollar hold a large amount of US Treasury securities as backing assets. As a result, dollar-pegged stablecoins are seen as extending the dominance of the US dollar in global fiat currencies into the digital realm.

What is a stablecoin?

Refers to virtual currencies whose prices are always stable. Stablecoins are a type of cryptocurrency that, unlike volatile assets such as BTC, ETH, and XRP, are backed by the US dollar and aim to maintain their value. In addition to stablecoins backed by the US dollar (USDT, USDC), there are also stablecoins that use algorithms.

In the U.S. Senate, the stablecoin regulation bill "GENIUS Bill" was defeated on the 8th, but on the 20th, the progress of the deliberation was decided with a large margin of 66 votes in favor and 32 votes against.

The amended bill strengthens consumer protection and ethical regulations. Concerns were raised by some Democrats about a conflict of interest, as the Trump family issues the stablecoin "USD1"; however, Congressman Gillibrand stated, "The primary purpose of the bill is to regulate stablecoins, and we do not need to address all of the President's ethical issues."

Treasury Secretary Bessent also pointed out after the rejection on the 8th that "the bill is a once-in-a-lifetime opportunity to expand U.S. influence in dollar dominance and financial innovation." He warned that without the bill, the innovation of stablecoins would be pushed overseas.

What will be the outcome of the tariff negotiations?

Mr. Bessent also expressed his views on the outcome of President Trump's tariff negotiations.

It mentions that the United States has established a 90-day suspension of tariff negotiations. While 18 major trading partners are involved, it points out that the deal with the United Kingdom has already been completed. It continued by stating that it believes several major deals will be announced within the next few weeks.

A temporary suspension of 90 days has also been established for China, with plans to conduct direct negotiations again. Additionally, whether to reduce the tariff rate to 10% will depend on whether each country sincerely comes to the negotiating table.

In addition, regarding the EU, while the 27 countries have different needs, it was stated that the new Chancellor of Germany, Merz, is optimistic that he may provide an opportunity to reset the relationship between the United States and Germany.