Bitcoin may benefit from US stablecoin dominance push

The United States push to maintain the dollar’s global dominance through stablecoin adoption could have unintended benefits for Bitcoin, as the world’s largest cryptocurrency is emerging as a potential federal reserve asset.

US Treasury Secretary Scott Bessent said the US government will use stablecoins to ensure that the US dollar remains the world’s global reserve currency during the White House Crypto Summit on March 7.

“We are going to put a lot of thought into the stablecoin regime, and as President Trump has directed, we are going to keep the US [dollar] the dominant reserve currency in the world, […]” Bessent said.

Bessent also repeated the Trump administration’s promise to end the war on crypto and committed to rolling back previous Internal Revenue Service guidance and punitive regulatory measures.

US Government, United States, White House, Donald Trump, Stablecoin — *President Trump delivers address to White House Crypto Summit. Source: The Associated Press*

The comments came just before Trump signed an executive order establishing a Bitcoin (BTC) reserve using cryptocurrency forfeited in government criminal cases. While the order does not involve direct federal Bitcoin purchases, it represents a shift in how the government views BTC.

BTC may benefit from the growing stablecoin adoption and push for more regulatory clarity, according to Omri Hanover, the general manager at Gems Trade blockchain launchpad.

“If Trump’s policy strengthens US financial dominance, Europe’s reluctance and ‘wait-and-see’ approach could weaken its economic leverage,” he told Cointelegraph, adding:

“This divide creates two market realities: US accelerates Bitcoin’s institutional adoption, drawing capital; and EU prioritizes compliance, risking a capital shift to US markets.”

Meanwhile, two major bills await congressional approval: the Stablecoin bill and the Market Structure bill, which aim to help lift the regulatory uncertainty around the US crypto industry.

Growing stablecoin issuer profits may flow into Bitcoin investments

The growing profits of stablecoin issuers could contribute to Bitcoin investments, further strengthening its status as a store of value.

Tether, the issuer of the world’s largest stablecoin, Tether USDt (USDT), said it would invest 15% of its net profit into Bitcoin to diversify its backing assets.

Tether’s Bitcoin holdings have proven to be lucrative when the firm posted a record $4.5 billion profit for the first quarter of 2024.

Approximately $1 billion stemmed from operating profits derived from US Treasury holdings, while the remainder of $3.52 billion comprised the market-to-market gains in the firm’s Bitcoin holdings and gold positions.

*Tether financial reserves, Q1 2024. Source: Tether*

Tether’s “bc1q” address currently holds over $6.8 billion worth of Bitcoin, making it the world’s sixth-largest Bitcoin holder, BitInfoCharts data shows.

Tether’s Bitcoin holdings earned the company $5 billion in profits during 2024, from its total $13 billion yearly profit, Cointelegraph reported on Jan. 31.