Treasury Secretary Predicts Dollar-Pegged Stablecoins Could Exceed $2T Valuation

U.S. Treasury Secretary Scott Bessent predicts the global stablecoin market cap could exceed $2 trillion in the coming years. 

Bessent issued the bullish forecast during a recent Senate Appropriations subcommittee hearing, as reported by Bloomberg. During the congressional hearing, Bessent outlined how dollar-pegged stablecoins could strengthen the dollar’s position in the global financial system. 

According to him, dollar-pegged stablecoins have the potential to expand the global use of the U.S. dollar. Specifically, he mentioned that the U.S. Congress is currently working on rules that mandate dollar stablecoin issuers to back every token with top-tier assets, such as U.S. Treasury Bills (T-Bills). 

Congress Invokes Cloture on GENIUS Act Amendment 

Bessent’s commentary comes a few hours after Congress voted to invoke cloture on Bill Hagerty’s substitute amendment to the stablecoin GENIUS Act. Hagerty made the amendment as part of efforts to gain Democratic support for the stablecoin bill. 

With cloture invoked, Congress will schedule a vote to adopt the amendment. According to pro-crypto journalist Eleanor Terrett, a final passage vote on the GENIUS Act could be held early next week. 

Following the advancement of the GENIUS Act in Congress, Bessent indicated that the legislation, mandating dollar-pegged stablecoins to be backed by U.S. Treasury Bills, would expand U.S. Dollar usage globally. 

Dollar-Linked Stablecoin to Hit $2T Valuation 

During the hearing, Bessent referenced a recent industry estimate projecting that dollar-linked stablecoins could reach $2 trillion in the next few years. Based on this assessment, these dollar-linked stablecoins would have up to $2 trillion worth of T-Bills backing them. 

He also cited a conservative estimate from Citigroup analysts, who suggest that dollar-pegged stablecoin issuers could purchase an additional $1 trillion worth of T-Bills by 2030 to back these tokens. 

Interestingly, Bessent characterized the $2 trillion dollar-pegged stablecoin market cap projection as ‘very reasonable.’ Accordingly, he asserted that the stablecoin valuation could ‘greatly exceed’ the $2 trillion mark. 

This view aligns with a similar sentiment expressed by David Sacks, the White House’s AI and Crypto Czar. As reported previously, Sacks suggested that legislation like the GENIUS Act could propel the stablecoin market to trillions of dollars, with the tokens fully collateralized by U.S. Treasuries.  

Currently, the global stablecoin market, comprising tokens pegged to the U.S. dollar and other fiat currencies such as the euro, is valued at $254.82 billion. Dollar-pegged stablecoins account for the majority of this valuation. 

For perspective, the top nine stablecoins are pegged to the dollar. They include USDT, USDC, USDe, DAI, USD1, FDUSD, PYUSD, TUSD, and USDD, with a combined valuation of roughly $233 billion, representing 91% of the total stablecoin market cap.