Bitcoin could profit from US stablecoin dominance push

The US push to take care of the greenback’s world dominance by way of stablecoin adoption may have unintended advantages for Bitcoin, because the world’s largest cryptocurrency is rising as a possible federal reserve asset.

US Treasury Secretary Scott Bessent stated the US government will use stablecoins to make sure that the US greenback stays the world’s world reserve foreign money through the White House Crypto Summit on March 7.

“We’re going to put plenty of thought into the stablecoin regime, and as President Trump has directed, we’re going to hold the US [dollar] the dominant reserve foreign money on this planet, […]” Bessent stated.

Bessent additionally repeated the Trump administration’s promise to end the war on crypto and dedicated to rolling again earlier Inner Income Service steering and punitive regulatory measures.

The feedback got here simply earlier than Trump signed an executive order establishing a Bitcoin (BTC) reserve utilizing cryptocurrency forfeited in authorities legal circumstances. Whereas the order doesn’t contain direct federal Bitcoin purchases, it represents a shift in how the federal government views BTC.

BTC could profit from the rising stablecoin adoption and push for extra regulatory readability, in response to Omri Hanover, the final supervisor at Gems Commerce blockchain launchpad. 

“If Trump’s coverage strengthens US monetary dominance, Europe’s reluctance and ‘wait-and-see’ method may weaken its financial leverage,” he informed Cointelegraph, including:

“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.”

In the meantime, two main payments await congressional approval: the Stablecoin invoice and the Market Structure bill, which intention to assist raise the regulatory uncertainty across the US crypto trade.

Associated: US Bitcoin reserve marks ‘real step’ toward global financial integration

Rising stablecoin issuer earnings could stream into Bitcoin investments

The rising earnings of stablecoin issuers may contribute to Bitcoin investments, additional strengthening its standing as a retailer of worth.

Tether, the issuer of the world’s largest stablecoin, Tether USDt (USDT), stated it might make investments 15% of its internet revenue into Bitcoin to diversify its backing property.

Tether’s Bitcoin holdings have confirmed to be profitable when the agency posted a record $4.5 billion profit for the primary quarter of 2024.

Roughly $1 billion stemmed from working earnings derived from US Treasury holdings, whereas the rest of $3.52 billion comprised the market-to-market positive aspects within the agency’s Bitcoin holdings and gold positions.

Associated: Paolo Ardoino: Competitors and politicians intend to ‘kill Tether’

Tether’s “bc1q” tackle at present holds over $6.8 billion price of Bitcoin, making it the world’s sixth-largest Bitcoin holder, BitInfoCharts knowledge exhibits.

Tether’s Bitcoin holdings earned the corporate $5 billion in earnings throughout 2024, from its complete $13 billion yearly revenue, Cointelegraph reported on Jan. 31.

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