Bitcoin could benefit from U.S. stablecoin dominance

Author: Zoltan Vardai, CoinTelegraph; Compiler: Wuzhu, Golden Finance

The United States maintains the dollar's global dominance by adopting stablecoins, which may bring unexpected benefits to Bitcoin as it is becoming a potential national reserve asset.

At the White House Cryptocurrency Summit on March 7, U.S. Treasury Secretary Scott Bessant said that the U.S. government will use stablecoins to ensure that the dollar remains the world's reserve currency.

"We will think a lot about the stablecoin system, as President Trump has directed, and we will keep the dollar as the world's primary reserve currency,"Bessant said.

The Treasury Secretary also reiterated the Trump administration's commitment to end the cryptocurrency war and promised to revoke previous IRS guidance and punitive regulatory measures.

President Trump speaks at the White House Cryptocurrency Summit. Source: Associated Press

Trump's remarks came just after he signed an executive order to build a Bitcoin reserve using cryptocurrency seized in government criminal cases. While the order does not involve direct federal Bitcoin purchases, it represents a shift in the government's view on cryptocurrencies.

Omri Hanover, general manager of Gems Trade blockchain launchpad, said that Bitcoin could benefit from growing stablecoin adoption and the push for regulatory clarity.

“If Trump’s policies reinforce America’s financial dominance, Europe’s hesitation and ‘wait-and-see’ attitude could undermine its economic influence,” he noted, adding:

“This divergence creates two market realities: the U.S. accelerates Bitcoin’s institutional adoption, attracting capital, while the EU prioritizes compliance, risking capital shifting to U.S. markets.”

Meanwhile, two major bills are awaiting congressional approval: the Stablecoin Act and the Market Structure Act, which aim to help eliminate regulatory uncertainty in the U.S. crypto industry.

Meanwhile, pro-cryptocurrency lawmakers are focusing on two major legislative priorities - stablecoins and general market structure clarity - that will help eliminate uncertainty about regulation of the U.S. crypto industry. However, Congress has yet to pass any relevant bills.

Growing profits of stablecoin issuers may flow into Bitcoin investment

Growing profits of stablecoin issuers may promote Bitcoin investment and further consolidate its position as a store of value.

Tether, the issuer of the world's largest stablecoin USDt, said it would invest 15% of its net profit in Bitcoin to diversify its supporting assets.

Tether's Bitcoin holdings proved profitable, with the company reporting a record $4.5 billion in profits in the first quarter of 2024.

About $1 billion came from operating profits on U.S. Treasury holdings, while the remaining $3.52 billion included market value gains on the company's bitcoin holdings and gold positions.

Tether's financial reserves, Q1 2024. Source: Tether

BitInfoCharts data shows that Tether's "bc1q" address currently holds more than $6.8 billion worth of Bitcoin, making it the sixth largest holder in the world.

On January 31, it was reported that Tether's Bitcoin holdings brought the company $5 billion in profits in 2024, while the company's total profits for the year were $13 billion.