Bitcoin may benefit from US stablecoin dominance push
The US push to maintain the dollar’s global dominance through stablecoin adoption could have unintended benefits for Bitcoin as it emerges as a potential national reserve asset.
During the White House Crypto Summit on March 7, US Treasury Secretary Scott Bessent said the American government would use stablecoins to ensure the US dollar remains the world’s global reserve currency.
“We are going to put a lot of thought into the stablecoin regime, and as President Trump has directed, we are going to keep the US [dollar] the dominant reserve currency in the world,” Bessent said.
The treasury secretary also repeated the Trump administration’s promise to end the war on crypto and committed to rolling back previous Internal Revenue Service guidance and punitive regulatory measures.
President Trump delivers address to White House Crypto Summit. Source: The Associated Press
The comments came just before Trump signed an executive order establishing a Bitcoin (BTC) reserve using cryptocurrency forfeited in government criminal cases. While the order does not involve direct federal Bitcoin purchases, it represents a shift in how the government views the cryptocurrency.
Bitcoin may benefit from the growing stablecoin adoption and push for more regulatory clarity, according to Omri Hanover, general manager at the Gems Trade blockchain launchpad.
“If Trump’s policy strengthens US financial dominance, Europe’s reluctance and ‘wait-and-see’ approach could weaken its economic leverage,” he told Cointelegraph, adding:
“This divide creates two market realities: US accelerates Bitcoin’s institutional adoption, drawing capital; and EU prioritizes compliance, risking a capital shift to US markets.”
Meanwhile, two major bills await congressional approval: the Stablecoin bill and the Market Structure bill, which aim to help lift the regulatory uncertainty around the US crypto industry.
Meanwhile, pro-crypto lawmakers have focused on two major legislative priorities — stablecoins and general market structure clarity — which would help lift the regulatory uncertainty around the US crypto industry. However, no related bills have yet been passed by Congress.
Related: US Bitcoin reserve marks ‘real step’ toward global financial integration
Growing stablecoin issuer profits may flow into Bitcoin investments
The growing profits of stablecoin issuers could contribute to Bitcoin investments, further strengthening its status as a store of value.
Tether, the issuer of the world’s largest stablecoin, USDt (USDT), said it would invest 15% of its net profit into Bitcoin to diversify its backing assets.
Tether’s Bitcoin holdings proved to be lucrative when the firm posted a record $4.5 billion profit for the first quarter of 2024.
Approximately $1 billion stemmed from operating profits derived from US Treasury holdings, while the remaining $3.52 billion comprised the market-to-market gains in the firm’s Bitcoin holdings and gold positions.
Tether’s financial reserves, Q1 2024. Source: Tether
Related: Paolo Ardoino: Competitors and politicians intend to ‘kill Tether’
Tether’s “bc1q” address currently holds over $6.8 billion worth of Bitcoin, making it the world’s sixth-largest holder, BitInfoCharts data shows.
Tether’s Bitcoin holdings earned the company $5 billion in profits during 2024, out of its total $13 billion yearly profit, Cointelegraph reported on Jan. 31.
Magazine: Bitcoin’s odds of June highs, SOL’s $485M outflows, and more: Hodler’s Digest, March 2 – 8
The CARF regulation, which brings crypto under global tax reporting standards akin to traditional finance, marks a crucial turning point.
The nascent real-world tokenized assets track prices but do not provide investors the same legal rights as holding the underlying instruments.
Rachel Reeves has hinted that taxes are likely to be raised this autumn after a major U-turn on the government’s controversial welfare bill.
Sir Keir Starmer’s Universal Credit and Personal Independent Payment Bill passed through the House of Commons on Tuesday after multiple concessions and threats of a major rebellion.
MPs ended up voting for only one part of the plan: a cut to universal credit (UC) sickness benefits for new claimants from £97 a week to £50 from 2026/7.
Initially aimed at saving £5.5bn, it now leaves the government with an estimated £5.5bn black hole – close to breaching Ms Reeves’s fiscal rules set out last year.
Read more:
Yet another fiscal ‘black hole’? Here’s why this one matters
Success or failure: One year of Keir in nine charts
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Rachel Reeves’s fiscal dilemma
In an interview with The Guardian, the chancellor did not rule out tax rises later in the year, saying there were “costs” to watering down the welfare bill.
“I’m not going to [rule out tax rises], because it would be irresponsible for a chancellor to do that,” Ms Reeves told the outlet.
“We took the decisions last year to draw a line under unfunded commitments and economic mismanagement.
“So we’ll never have to do something like that again. But there are costs to what happened.”
Meanwhile, The Times reported that, ahead of the Commons vote on the welfare bill, Ms Reeves told cabinet ministers the decision to offer concessions would mean taxes would have to be raised.
The outlet reported that the chancellor said the tax rises would be smaller than those announced in the 2024 budget, but that she is expected to have to raise tens of billions more.
It comes after Ms Reeves said she was “totally” up to continuing as chancellor after appearing tearful at Prime Minister’s Questions.
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Why was the chancellor crying at PMQs?
Criticising Sir Keir for the U-turns on benefit reform during PMQs, Conservative leader Kemi Badenoch said the chancellor looked “absolutely miserable”, and questioned whether she would remain in post until the next election.
Sir Keir did not explicitly say that she would, and Ms Badenoch interjected to say: “How awful for the chancellor that he couldn’t confirm that she would stay in place.”
In her first comments after the incident, Ms Reeves said she was having a “tough day” before adding: “People saw I was upset, but that was yesterday.
“Today’s a new day and I’m just cracking on with the job.”
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Reeves is ‘totally’ up for the job
Sir Keir also told Sky News’ political editor Beth Rigby on Thursday that he “didn’t appreciate” that Ms Reeves was crying in the Commons.
“In PMQs, it is bang, bang, bang,” he said. “That’s what it was yesterday.
“And therefore, I was probably the last to appreciate anything else going on in the chamber, and that’s just a straightforward human explanation, common sense explanation.”
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