US Vice President JD Vance argued that stablecoins, tied to assets like the US dollar, can bolster the economy rather than threaten the dollar.

Speaking at the Bitcoin 2025 conference in Las Vegas on May 28, he promoted stablecoin legislation as part of the administration’s economic strategy.

Vance referenced the GENIUS Act, a proposed bill aimed at regulating digital assets, which recently passed a procedural vote in the Senate with bipartisan support.

Vance highlighted the need to legitimize stablecoins to create economic opportunities, even as the bill may face hurdles in the House where lawmakers are considering their own regulations.

He also outlined broader cryptocurrency policies, including plans for a strategic bitcoin reserve and regulatory changes to allow banks to hold crypto assets and encourage retirement plan investments in cryptocurrencies.

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🔗 Source: CNBC

🧠 Food for thought

1️⃣ Stablecoins represent a trillion-dollar opportunity for U.S. financial dominance

The stablecoin market has already grown to exceed $230 billion with transaction volumes surpassing $20 trillion annually, demonstrating significant integration into the digital economy 1.

This explains why the Trump administration views stablecoins as a “force multiplier” rather than a threat. They represent a way to extend dollar dominance into digital finance amid growing competition from alternatives like China’s digital yuan.

David Sacks, Trump’s crypto advisor, has specifically noted that regulated stablecoins “could create trillions of dollars of demand for our Treasuries practically overnight” by requiring dollar-backed reserves [from original article].

The administration’s position marks a substantial shift from previous regulatory approaches that were more cautious about cryptocurrency’s relationship with traditional financial systems.

This stance aligns with broader geopolitical competition, as countries race to establish dominant positions in the future of digital finance, with the U.S. seeking to leverage its existing financial power rather than resist technological change.

2️⃣ Political tensions reveal unprecedented conflicts of interest in crypto regulation

The GENIUS Act faces significant opposition from Democrats who have highlighted the conflict of interest created by President Trump’s personal cryptocurrency ventures, including his own meme coin and family stablecoin business [original article, 16].

Senators Warren and Merkley have explicitly warned that Trump-linked crypto deals potentially violate the Emoluments Clause of the Constitution and federal ethics laws by creating financial opportunities for the president while he pushes related legislation 2.

Progressive groups have mobilized to oppose the bill specifically because it lacks provisions preventing elected officials from profiting from stablecoin ventures during their tenure 3.

The controversy has fractured what was initially bipartisan support for stablecoin regulation, with 15 Democrats initially supporting the bill but opposition growing as conflict of interest concerns intensified [original article, 16].

These tensions demonstrate the complex challenge of regulating emerging financial technologies when policymakers have direct financial stakes in the outcomes.

3️⃣ Competing visions for stablecoin regulation highlight fundamental security concerns

Critics of the GENIUS Act, including Senator Warren, argue the legislation lacks essential consumer protections and could facilitate illicit activities including terrorism financing and sanctions evasion due to insufficient regulatory oversight 4.

The bill’s supporters counter that proper regulation would enhance consumer confidence while preventing financial crises by requiring issuers to maintain reserves of assets backing stablecoins on a one-to-one basis 5, 6.

Financial stability concerns focus on whether stablecoin issuers would be permitted to invest reserves in potentially risky assets, with critics drawing parallels to conditions that contributed to previous financial crises 4, 1.

Experts at CSIS have warned that the proposed dual state-federal regulatory structure could lead to a “race to the bottom” where states compete to offer the least stringent regulations, undermining national standards 1.

These divergent perspectives represent a fundamental debate about whether stablecoins primarily represent a technological innovation that should be encouraged or a potential threat to financial stability that requires strict controls.

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