Digital Assets are the new frontier of "money" and facilitate people making transactions in a free and fair manner. There are some in the space of cryptocurrency that have used technology to make it easier to conduct transactions while also shoring up the U.S. economy.
Although I am no fan of finding ways to purchase U.S. debt, it is important to recognize the threat our expanding debt poses to the U.S. economy and economies worldwide. Interestingly, one way to ease this issue might just be cryptocurrencies - specifically stablecoins.
In fact, there are a few stablecoins already helping out in this way. Robinhood, Kraken, and Galaxy Digital recently came out with a new stablecoin that they created together, and Ripple came out with one of their own as well. Stablecoins solve a lot of problems with the current cryptocoin market which helps drive understanding of the benefits of the blockchain and increases the adoption of the technology. And, they do this while buying U.S. debt.
A great example of a player in the cryptocurrency space helping the U.S. economy while providing security against a debt crisis is the digital asset company Tether. In its recent end-of-year 2024 attestation, Tether announced $13 billion in annual net profits and a staggering $113 billion in U.S. Treasury holdings. It is quietly becoming a geopolitical financial instrument that extends American monetary influence into the digital realm.
Tether's U.S. Treasury exposure positions it among the largest global holders of these securities, digitally reinforcing the dollar's global supremacy. By backing its stablecoin, known as USDT, with U.S. government debt, Tether is "long" the U.S. dollar in a profoundly modern sense - transforming traditional treasury management into a 21st-century financial strategy.
Tether's successes are therefore tightly coupled with the dollar's strength; for every investor seeking exposure to digital assets via Tether, there is an implicit vote of confidence in the greenback's global primacy. And by embracing U.S. Treasurys, Tether effectively promotes the dollar's influence around the world. This bolsters the argument that stablecoins can act as gateways to the broader U.S. financial system.
More than 350 million individuals globally rely on Tether as a liquid, easy-to-access digital version of the American dollar, further entrenching the currency's dominance in global commerce and investment.
President Trump's recent executive order on digital assets provides the perfect policy backdrop to this financial evolution. The order explicitly promotes "the sovereignty of the United States dollar, including through actions to promote the development and growth of lawful and legitimate dollar-backed stablecoins worldwide."
On Feb. 4, newly appointed White House AI and digital asset czar David Sacks held a press conference with the chairmen of the House and Senate Agriculture Committees, the House Financial Services Committee, and the Senate Banking Committee. Sacks was clear on the goals of this bicameral working group, one of which is to develop workable stablecoin legislation that will drive U.S. dollar dominance internationally. Global proliferation of U.S. dollar-backed stablecoins, Sacks argued, will generate trillions of dollars of demand for U.S. Treasurys, bringing down long-term interest rates and ensuring the U.S. dollar remains the dominant global reserve currency.
Effectively, stablecoins like Tether, Ripple's RLUSD, and Robin/Kraken/Galaxy Digital USDG are exporting American financial technology and extending the dollar's reach into previously inaccessible markets. Now, they each are doing this in their own way, so as an investment - do your research. But in a macro-public policy view, these coins are a great development.
Stablecoins should be viewed by the Trump administration as a strategic ally in America's ongoing effort to maintain financial leadership in an increasingly digital world. By converting U.S. government debt into a liquid, globally accessible digital asset, stablecoins are redefining monetary soft power for the blockchain era. It gives President Trump a political victory, and the U.S. a leg up in the global digital asset race already underway.