David Sacks, appointed by President Trump as the czar for Artificial Intelligence (AI) and Cryptocurrency, stated that the U.S. government has confirmed plans to regulate innovations in stablecoins, and to introduce markets such as USDT domestically. Tether, the issuer of USDT stablecoins, expressed willingness to decentralize the ownership of U.S. debt.
Sacks emphasized that stablecoins, like Bitcoin, are a key area of focus for the Trump administration.
He mentioned that the stablecoin market "has taken off, but mainly overseas," and added that the U.S. now hopes to "bring this innovation to the domestic front."
According to CoinTelegraph, stablecoins are a $227 billion industry, with 97% of the market share composed of stablecoins pegged to the U.S. dollar, such as Tether's USDT. CoinGecko data shows that USDT alone accounts for over 60% of the total stablecoin market capitalization.
Sacks said: "I believe the power of stablecoins lies in their ability to expand the dominance of the dollar internationally and extend it into the digital online realm."
He claimed that stablecoins could create "potentially trillions of dollars" in new demand for U.S. Treasury bonds, which could help support its debt and reduce long-term interest rates.
Sacks highlighted the potential benefits of stablecoins in expanding the influence of the dollar in global finance.
Previously, the White House committed in an executive order signed by Trump on January 23 to promote the sovereignty of the dollar, "including taking actions to foster the development and growth of legitimate, legal U.S. dollar-backed stablecoins globally."
While promoting stablecoins, the executive order prohibited the issuance and all potential Central Bank Digital Currencies (CBDCs), focusing on U.S. stablecoins as digital dollars.
Sacks stated that as part of the stablecoin initiative, the White House aims to support the issuance of stablecoins through legislation.
However, the USDC stablecoin issued by Circle is already issued and managed in the U.S., with its stablecoin positioned as "regulated and fully reserved."
The USDC stablecoin is the second largest in the market after USDT, accounting for 24% of the total stablecoin market capitalization.
Unlike USDC, which is widely regarded as a regulated U.S. stablecoin, USDT faces issues in jurisdictions like the European Union, where it is increasingly labeled as a non-compliant stablecoin.
On the other hand, USDC has received legal recognition in several global economies, including Canada and the European Union, and will become the first issuer to comply with the crypto asset market regulatory framework in July 2024.
As USDT occupies more than half of the stablecoin market share, the Trump administration has expressed interest in introducing stablecoins domestically, which could lead to increased attention in the U.S.
In October 2024, Paolo Ardoino, CEO of Tether, told CoinTelegraph that Tether is "the best friend of the U.S. government," as the issuer holds more U.S. securities than Germany and "much more than any other competitor or financial institution in the world."
He stated: "We are pleased to decentralize the ownership of U.S. debt, which will make the U.S. more resilient."
In addition to the positive news about stablecoins from Sacks, the U.S. Commodity Futures Trading Commission (CFTC) also welcomed progress.
Caroline Pham, Acting Chair of the U.S. CFTC, announced that the agency will gradually cease enforcement practices, which could affect its attitude towards cryptocurrency companies during the Trump administration.
Pham stated that the U.S. CFTC is restructuring its enforcement division's priorities, focusing on fraud, indicating that this move will cease enforcement against good citizens. The commission will divide its responsibilities into two working groups, mainly focusing on retail fraud and violations of the Commodity Exchange Act, as well as complex fraud and manipulation.
Brian Young, Acting Director of Enforcement, said: "This restructuring of the working groups will enhance our robust and dynamic enforcement program, allowing our excellent staff to focus their expertise on seeking justice for victims and maintaining public confidence in the integrity of our markets."
