Treasury's Bessent sees crypto as America's next tool for keeping the U.S. dollar on top

U.S. Treasury Secretary Scott Bessent stated that American leadership in digital assets could bolster the dollar's worldwide dominance, as technological strength grows in importance to economic influence.

Speaking at Ripple's Swell conference on Tuesday with CEO Brad Garlinghouse, Bessent argued that while military strength historically underpinned reserve currency power, this is increasingly shifting toward technological leadership. He noted, "We will keep our military umbrella, but I think more and more it's becoming a technology umbrella."

Bessent views digital assets as part of a larger competition, citing the growing divergence between U.S. and Chinese technology ecosystems, where nations and corporations must choose among AI and semiconductor technologies. He stated, "I think that digital assets are going to be no different, and we are going to win in the digital asset stack, and that's gonna continue to fortify the [U.S.] dollar."

The administration's effort to bring crypto businesses onshore is framed by Bessent as more than just a financial market push; it relates to infrastructure sustaining U.S. economic power. The GENIUS Act, passed by the Trump administration, established a federal regulatory framework for stablecoins.

Bessent suggested stablecoins could strengthen the dollar's standing by increasing access to U.S. currency in nations experiencing currency devaluation or volatility. He mentioned that over 90% of stablecoins are backed by U.S. dollars, and their issuers often hold U.S. government securities as reserves. He added, "I think it's gonna be an important source of funding for the Treasury."

Despite the failure to pass the Clarity Act, which intended to create a federal industry framework, Bessent indicated the Treasury Department could collaborate with the SEC and CFTC to advance oversight through agency action. He stated, "At Treasury, we have a lot of convening powers," describing the two agencies as "great partners" for forming a model regulatory framework.

Addressing concerns about debanking, Bessent maintained that regulatory safeguards could still provide protection, even without the Clarity Act. He suggested, "I think we can set up regulatory best practices, guardrails that will prevent that from happening again."