As the GENIUS Act gains momentum in the U.S. Senate, a new chapter for digital finance and the broader economy could be on the horizon. David Sacks, the White House’s top advisor on cryptocurrency and artificial intelligence, believes that the stablecoin bill could generate unprecedented demand for U.S. Treasurys, potentially injecting trillions into the American financial system. Yet, despite growing support, political and regulatory complications remain.
A Trillion-Dollar Opportunity for Treasurys
Speaking on CNBC’s Closing Bell Overtime, Sacks highlighted the transformative potential of stablecoins, digital assets pegged to traditional currencies like the U.S. dollar. He noted that over $200 billion in stablecoins already exist in largely unregulated environments.
“By providing legal clarity and a regulatory framework, we could potentially unlock trillions of dollars in demand for U.S. Treasurys almost overnight,” Sacks said. His remarks suggest the GENIUS Act is more than a crypto reform bill, it’s a national economic strategy aimed at boosting the appeal of U.S. debt instruments globally.
The GENIUS Act: Backed but Not Unchallenged
The legislative push centres on the GENIUS Act, which recently cleared a critical procedural vote. With 15 Democratic senators now backing the bill, it appears poised to pass without facing a filibuster.
Sacks framed the legislation as pivotal for modernising America’s payment infrastructure. “Stablecoin offers a more efficient, cost-effective, and smoother payment system. This is ba whole new set of payment rails for the U.S. economy, and it strengthens the dollar’s dominance in the digital age,” he added.
However, bipartisan consensus is not guaranteed. Despite broad support, the bill is facing late-stage complications due to unrelated amendments, such as a late fee cap proposed by Senator Tammy Baldwin. Banking institutions, a vital pillar of the financial sector, are wary of this inclusion and may withdraw their support.
Political Friction and Trump Ties
A major point of contention arises from the Trump family’s entanglement in the crypto world. Although Donald Trump reportedly divested his digital assets in line with White House ethics rules, his family’s crypto ventures remain active. World Liberty Financial, a firm linked to the Trumps has recently launched USD1, a stablecoin backed by U.S. Treasurys and cash deposits.
This development has fuelled criticism from some Democrats who fear the legislation could inadvertently benefit the Trump family’s business interests, particularly their involvement in meme coins and other speculative crypto instruments.
Such concerns threaten to politicise the bill, even as it aims to create a nonpartisan framework for digital finance.
Stablecoins: Growing Influence, Global Reach
Stablecoins have rapidly evolved into a major financial force. Unlike volatile cryptocurrencies like Bitcoin, stablecoins are tied to real-world assets, making them ideal for payments and remittances. Tether currently dominates the market, accounting for about 60% of all stablecoin activity.
According to Deutsche Bank, stablecoin transactions exceeded $28 trillion in 2022, outpacing traditional payment giants like Visa and Mastercard. This staggering figure underscores why regulators and investors are paying attention.
The international dimension also looms large. Abu Dhabi’s MGX Investment recently committed $2 billion to Binance, the world’s largest crypto exchange, marking the largest capital injection in its history, another sign of stablecoins’ swelling significance on the global stage.
Promising, But Fraught with Risk
Despite Sacks’ confidence and significant legislative backing, the GENIUS Act’s path forward remains uncertain. Regulatory conflicts, political opposition, and lobbying from the banking sector could delay or derail its passage.
Still, if passed, the bill could lay the groundwork for a more transparent, efficient, and robust digital economy, one where the U.S. dollar retains its dominance, even in the age of decentralised finance.
