"Stablecoins Could Grow to $2 Trillion Market... Supporting Dollar Value"

Scott Baesert, U.S. Secretary of the Treasury,
Remarks at the U.S. Senate Budget Subcommittee

Scott Baesert, U.S. Secretary of the Treasury, appeared before the U.S. Senate Budget Subcommittee on the 11th (local time) and answered questions from lawmakers. Photo by AFP

Scott Baesert, U.S. Secretary of the Treasury, stated that the future market size of dollar-based stablecoins could expand to $2 trillion (approximately 2,740 trillion KRW). He predicted that such growth in stablecoins would also contribute to strengthening the dollar’s status as the global reserve currency.

On the 11th (local time), Secretary Baesert said at the U.S. Senate Budget Subcommittee, "Legislation for stablecoins backed by U.S. Treasury bonds will expand the use of the dollar through stablecoins worldwide."

He remarked, "I believe $2 trillion is a very, very reasonable figure for the future market capitalization of stablecoins. I also think it could far exceed that figure." As of the end of March, the market capitalization of stablecoins was $237.3 billion, nearly doubling compared to a year ago. The combined market capitalization of Tether (USDT) and USD Coin (USDC) is about $200 billion.

Stablecoins are cryptocurrencies that peg their value to a specific asset in order to minimize price volatility. They are mainly designed to maintain an exchange value fixed to currencies such as the dollar or euro. To sustain their value, stablecoins are backed by collateral, with U.S. Treasury bonds being widely used for this purpose.

Secretary Baesert reiterated his view that stablecoins will reinforce the dollar’s status as the reserve currency. He added, "The Trump administration is committed to maintaining and strengthening the status of the dollar as the reserve currency."

The dollar’s share as the global reserve currency continues to decline. According to a report by the European Central Bank (ECB), the dollar’s share of global foreign exchange reserves decreased by 2 percentage points over the past year. As of the end of last year, the dollar’s share stood at 58%, which remains high, but is down 10 percentage points compared to ten years ago.

The Genius Act, which passed the Senate on this day, stipulates requirements for stablecoins, including 1:1 collateralization, anti-money laundering measures, and joint supervision by federal and state governments. The legislation is being viewed as a move to bring stablecoins into the regulatory framework.