Washington eyes dollar stablecoin push to support U.S. Treasuries

The administration is considering a program to promote dollar-denominated stablecoins overseas, according to people familiar with the plans. The effort would aim to strengthen the dollar’s reserve role and raise demand for U.S. Treasuries. Treasury, the State Department and the U.S. International Development Finance Corporation have been named as potential participants.

The proposal is preliminary. No partner companies, target countries, funding amounts or timetable have been identified. People familiar with the deliberations say the idea surfaced in late September 2026 and remains under early review.

The GENIUS Act, enacted in July 2025, requires payment stablecoin issuers to back tokens one-for-one with reserves that can include cash and short-term Treasury bills. Under that rule, each dollar of stablecoin issued increases issuers’ demand for reserve assets, including short-term U.S. government securities.

About $300 billion of stablecoins are in circulation, and nearly all are dollar pegged. Filings from leading issuers show one had reserve assets of roughly $187.7 billion against liabilities of $183.4 billion at the end of the second quarter. The supply of top dollar tokens contracted in the first half of 2026; two leading tokens each fell by nearly $3 billion in that period.

People familiar with the plan indicate any overseas push would focus on payments and remittances rather than trading activity, concentrating on the segment of demand less tied to crypto market cycles.

International regulators and central banks have raised concerns about wider adoption of dollar-pegged tokens. The International Monetary Fund has warned that broader stablecoin use could accelerate capital flight, weaken local currencies and limit policymakers’ control over cross-border financial flows. Research from the Bank of Korea linked domestic demand for dollar tokens to pressure on the won. Those factors have made some governments cautious about greater dollarization.

Dollar stablecoins are administered by identifiable companies subject to U.S. law. Those firms have the technical ability to freeze individual addresses or restrict access to tokens. Some recipient governments have indicated they would not accept losses if a foreign issuer froze assets held by their citizens.

The proposal would face technological and geopolitical competition. China’s digital yuan is already used on a cross-border central bank digital currency platform. The European Central Bank plans a 12-month digital euro pilot expected to begin in the second half of 2027 and has launched infrastructure to connect blockchain markets with eurozone settlement systems. A group of European banks is developing a MiCA-compliant euro stablecoin on public Ethereum aimed at payment corridors targeted by dollar tokens. Many businesses continue to use conventional multi-currency accounts and payment services that settle transactions without token rails.

Officials say three concrete elements would be needed for the plan to move beyond discussion: a named agency mandate or budget line, a disclosed private partner issuer and a target jurisdiction with a signed implementation agreement. Key provisions of the GENIUS Act take effect on January 18, 2027, and Treasury’s proposed rules for stablecoin issuance remain under public comment, leaving the domestic regulatory framework that would support an overseas initiative incomplete.

Until those elements appear, the program remains at the proposal stage.