According to U.S. Treasury Secretary Scott Bessent, stablecoins are likely to be favored over central bank digital currencies (CBDCs) by people worldwide. In a recent interview with Bloomberg, Bessent expressed his confidence in the stablecoin sector, describing it as an “exciting new payment rail.”
“And importantly, it will be a source of demand for the US Treasury market, because if you think about it, in terms of preference globally, would you rather have a private stablecoin that’s backed by US Treasuries with US best practices and regulation, or would you rather have an [European Central Bank] or [People’s Bank of China] central bank digital currency that if you write a mean X post, the government could turn off. I think everyone’s going to choose the US private sector with US regulation all day, every day.”
Bessent has been actively advocating for the passage of the Senate version of the GENIUS Act to members of the House of Representatives. He believes that the bill, if passed as is, could progress through the House by mid-July.
The proposed legislation would mandate stablecoin issuers to maintain a 1:1 ratio of backing for their assets. The bill specifies that stablecoin issuer reserves can consist of US currency, funds held as demand deposits or insured shares at an insured depository institution, and Treasury bills, notes, or bonds.
The Senate approved the bill last month, marking a significant step forward in regulating the stablecoin industry.
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