(Bloomberg) – President Donald Trump has placed the stable cryptocurrencies at the forefront of efforts to maintain the global superiority of the dollar, and to align the interests of the US government strongly with exporters’ interests such as Tether Holdings Ltd. And Circle Internet Financial Ltd.
On Thursday, Trump signed an executive order to protect the dollar, “including procedures to enhance the development and growth of legal and legitimate currencies supported by dollars worldwide.” Meanwhile, any other work was prevented from the central bank’s digital currency, which has banned a tool seen as a potential competitor.
Paying the stable currencies – cryptocurrencies designed to be less volatile than symbolic currencies such as bitcoin and therefore more suitable for payments and transfers – in the battle to maintain the dollar as a global backup currency in the face of resisting geopolitical competitors such as China and Russia.
He also plays a role in the arguments made by the CEO of Tether, Paulo Erdino, and his Circle counterpart, Jeremy Alere, publicly while they are seeking to enhance the use of their stable currencies.
Campbell Harvey, a professor of finance at Duke University, said that the issues such as Circle and Tether are among the “big winners” of Trump’s executive order.
Stable currencies are not without their critics. The sudden collapse of a currency called Terrausd in 2022 sparked controversy about how it affects financial stability and caused a short rush by Tether holders to recover their coins. In the previous year, Tether agreed to pay $ 41 million to settle the allegations of the commodity futures trading committee that it had lied about its reserves.
There are also concerns about how to use distinctive symbols and those who make them. A report published by TRM LABS in March said that the USDT currency was the most used currency for criminal activity such as terrorist financing in 2023. The Wall Street Journal reported in October that the federal prosecutors in Manhattan were investigating Tuhar on possible violations of sanctions and funding. Money laundering rules.
Tether said she is not aware of this such investigation, and that she is working with law enforcement agencies to ensure that its distinctive symbol is not used for illegal purposes.
“We hope that the new regulations will provide clarity, which is intense to companies, institutions and financial technology companies that are looking to enter the field of digital assets,” Tuhar said in a statement on Friday.
Expansion role stable currencies
During the Trump era, who carried his election as a defender of encrypted currencies, anxiety about stable currencies allows them to support them.
The stable currency legislation in Congress has been discussed for years. Trump’s executive order directed a specially created working group to recommend an organizational framework for digital assets, including stable currencies within six months. “It is the speed of lightning,” said Campbell from Duke.
Trump’s executive matter comes at a time when the distinctive symbols are increasingly used for payments and funds, especially in emerging economies – which gives them the greatest importance as the dollar agents.
David Sachs, Caesar AI and Cross Currency in the White House, who has a major adventurous capital and a major political donor, said on Thursday that stable currencies provide “the opportunity to expand the domination of the dollar at the international level,” adding that the United States “can mainly create a digital dollar that can For people all over the world the world will use it. “
Other judicial states, including the European Union and China, take a different approach by following the digital currencies issued by central banks, known as CBDCS. Under the new market system in the European Union in encrypted assets, cryptocurrency exchanges must remove a triangle currency from its platforms in the mass because the company does not yet have the required license for electronic money.
Competitive advantage
“In the field of digital assets that are formed, the United States will follow the market -based approach to pushing encrypted currencies and stable currencies in which the United States has a competitive advantage and will have an increasing competitive advantage in the coming years,” said Bruonelo Rosa, head of the Digital Asset Department. Research in Rosa and Robini Associated and author of “Smart Money: How will digital currencies win the new Cold War – and why the West needs to move now.”
While there are stable currencies associated with other currencies such as the euro and the Philippine peso, the largest part of the traded symbols are linked to the dollar. The Circle’s USDT and USDT represent the largest ever, approximately 90 % of the total market value of stable currencies.
With Tether and Circle expanding, their purchases from the debt bonds denounced in dollars also expand, because they must keep these assets to support their stable currencies. Tether kept $ 84.5 billion of treasury bonds as of September 31; Circle retained $ 15.1 billion of treasury bonds and another $ 19.3 billion of treasury re -purchase agreements at the end of November.
The role of the main marginal buyer of US government debts is not lost on Erdino from Tether, which intensifies pressure to deliver this point to the Trump team.
“The presence of new buyers and the base of a variety of users to buy and possess treasury bills will be very important for the future of the American economy.” “We want to be able to explain this to the new administration.”
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He said: “The danger is that you allow the market to develop without enough controls and balances, and therefore this will be the place for the illogical abundance and at the end of the end the collapse of encrypted currencies.”
The Financial Stability Council said in a report issued in October that although the use of stable currencies for payment and settlement is limited, “the links between the encrypted asset markets and the basic financial markets continue to increase and may lead to risks to financial stability.”
Currently, Trump’s actions encourage stable currencies. Erdino told Lacqua that Tether may consider expanding in the United States, but “in a cautious way.” The company did not respond immediately to the request to comment on the effects of Trump’s executive.
Tether reserves are partially managed by Cantor Fitzgerd LP, whose CEO Howard Lootnick is Trump’s choice for the post of Minister of Commerce. Lootnick said he would leave Cantor if he was confirmed.
Circle was secretly presented a draft registration for a preliminary public offering at the Securities and Stock Exchange Committee in January 2024. The Air said in October that the company is still committed to listing despite the delay. USDC trading has enlarged almost 50 % since Trump’s victory in the elections, reaching $ 52 billion.
“The European Labor Organization explains that the United States will also be a pioneer in free -market free market competition,” said Dante Despairi, chief strategy official and head of global policy in Serkel, in a statement.
The Executive Officer of Trump said, “Not only benefits the issuance authorities in the United States, but also has a global double impact, and supports the growth of stable currencies supported by US dollars through the judicial states “.
-With the help of Anna Eyera, Sidharta Chocolate, and Emily Nicole.
(To add a comment from Tathar in the ninth paragraph.)
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