Stablecoins as America’s new engine for debt.

The global financial landscape is shifting, and nowhere is that more visible than in the market for US Treasury bonds. For decades these bonds formed the bedrock of the international monetary system, the ultimate source of liquidity, safety and trust. But that foundation has started to move. Major foreign buyers such as China, Japan and Saudi Arabia have reduced or even halted their purchases of US debt. Geopolitical tensions play a central role in that trend, and the consequence is clear. Lower demand for Treasuries erodes confidence in the dollar and weakens the system built around it.

At the same time a new and unexpected engine of demand has emerged. Stablecoins. What began as a digital payment tool inside crypto has evolved into a critical piece of financial infrastructure used globally by consumers, businesses and financial institutions. Since the United States formally regulated stablecoins through the Genius Act a structural shift has taken place. Issuers are now required to fully back their tokens with safe and liquid assets, with US Treasuries at the core. Every new stablecoin minted must therefore be matched by the purchase of US government debt.

This instantly makes stablecoins strategically important for the United States. They solve a growing problem that is increasingly difficult to manage. The world needs more digital dollars, and stablecoins are the most efficient form of them. Because they must remain fully backed at all times, they create automatic and scalable demand for US Treasuries. Deputy Treasury Secretary Scott Bessent recently highlighted this by stating that stablecoins could generate trillions of dollars in net new demand for US government debt in the coming years. No other country, fund or central bank is willing or able to provide demand at that scale.

By linking digital dollars directly to US government bonds something fundamental changes in the balance of power. Even as traditional buyers step back a new global infrastructure is forming around stablecoins. Any growth in the digital use of the dollar, from international trade to consumer payments, directly strengthens the demand for Treasuries. This helps keep the dollar attractive, liquid and trusted at a time when geopolitics are becoming more volatile and existing financial systems are under pressure.

Stablecoins have therefore become far more than a digital payment instrument. They are a new pillar supporting confidence in the dollar and an essential part of America’s strategy to preserve its global financial position. They connect the digital economy to the US capital markets in a scalable and efficient way. In the coming years they will grow into one of the most important mechanisms through which the United States finances its debt and maintains its financial power.