US Treasury Department head has allowed the possibility of growth of the steblecoin market to $2 trillion

What’s new? US Treasury Secretary Scott Bessent has said that the market capitalization of dollar-pegged stablecoins could reach $2 trillion in the next few years. Speaking at a Senate hearing, he also reiterated the potential of stablecoins to strengthen the dollar’s position in the global financial system.

Material by Bloomberg

What else is known? Bessent emphasized that the current presidential administration is committed to preserving the dollar’s status as the world’s reserve currency.

He also noted that legislation is currently being considered in Congress that would establish requirements for issuers of dollar-stablecoins. Specifically, they must back the coins they issue with high-quality assets such as Treasury bills.

“Stablecoin legislation backed by US Treasuries or T-bills will create a market that will expand US dollar usage via these stablecoins all around the world. I think that 2 trillion is a very, very reasonable number, and I could see it greatly exceeding that,” Bessent said.

He added that the dollar’s status had been questioned many times, but those fears were dispelled as new dynamics gave the US currency another boost.

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Predictions of other analysts regarding the stable coinmarket are more modest. For example, Citi Bank said earlier this year that under the baseline scenario, stablecoin issuers could purchase more than $1 trillion worth of Treasuries by 2030.

At the time of writing, dollar-pegged stablecoins have a market capitalization of $246,8 billion. Tether’s USDT and Circle’s USDC hold the largest market shares with capitalizations of $155,2 billion and $61,2 billion, respectively.

In early May, Democratic senators prevented a bill on stablecoins, known by the acronym GENIUS, from advancing. At the time, Bessent noted that by doing so, the upper house of Congress missed an opportunity to expand the dollar’s dominance.

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The House of Representatives is currently considering its own STABLE stablecoin transparency and accountability bill, which has already been approved by the Finance Committee.

Among other things, STABLE would impose a two-year moratorium on the issuance of stablecoins backed by independently issued digital assets, and require reserves to be kept separate from business funds.