Trump Admin Touts Dollar-Backed Stablecoins to Cement Global Dominance

The Trump administration is exploring a plan to promote dollar-backed stablecoins overseas in an effort to bolster the US dollar's global dominance and increase demand for U.S. Treasury securities.

The plan, which involves joint ventures with private companies, aims to boost the dollar's stature as the premier global reserve currency.

According to Bloomberg, the Treasury and State Departments could play key roles in promoting US dollar stablecoins globally, alongside the US International Development Finance Corporation.

Stablecoins are blockchain-based digital tokens whose values are pegged to an external reference, such as the U.S. dollar. They account for nearly 90% of the total stablecoin market value of $292.49 billion.

The plan has raised concerns that it could create severe risks for emerging economies with current-account deficits that are vulnerable to capital outflows.