US Eyes Dollar Stablecoin Push Overseas to Boost Treasury Demand

The US government is considering an initiative to promote dollar-denominated stablecoins overseas. The goal is to protect the dollar's place as the world's reserve asset and raise demand for US Treasuries, which stablecoin issuers typically hold as reserves.

Joint ventures between the government and private-sector firms could support stablecoin projects in overseas markets, with several federal agencies involved. The initiative may include creating joint ventures between the government and private companies to advance US foreign policy goals through stablecoins.

The total stablecoin market cap is about $306 billion, with Tether's USDT holding nearly 60%. Dollar-pegged stablecoins represent about $305 billion of that market cap. The platform's net flow data shows positive flows for several dollar stablecoins, including $1.2 billion for USDC and $1.1 billion for USDT.

Washington's plan comes at a time when other economies are developing competing payment infrastructure, such as China's digital yuan in Project mBridge and the European Central Bank's digital euro project.