The Trump administration is weighing a public-private partnership to promote U.S. dollar-backed stablecoins overseas, according to a Bloomberg report published September 23 citing people familiar with the deliberations. The Treasury Department, State Department, and U.S. International Development...
"Dollar-pegged stablecoins reinforce the dollar's role rather than weaken it." — Scott Bessent, U.S. Treasury Secretary
The Trump administration is weighing a public-private partnership to promote U.S. dollar-backed stablecoins overseas, according to a Bloomberg report published September 23 citing people familiar with the deliberations. The Treasury Department, State Department, and U.S. International Development Finance Corporation (DFC) are the three agencies under discussion. No countries, companies, or funding commitments have been announced.
The initiative sits atop a $302.8 billion stablecoin market in which dollar-pegged tokens account for 99.4% of total supply. Tether (USDT) holds $141 billion in U.S. Treasury bills — more than Germany or Israel — while Circle's USDC backs $74.6 billion in circulation. The GENIUS Act, signed July 18, 2025, requires one-to-one reserves in high-quality liquid assets, effectively channeling issuer capital into short-term government debt. With U.S. gross national debt at $40.1 trillion as of September 3, 2026, and 10-year yields above 5%, stablecoin-driven Treasury demand has become a fiscal policy consideration, not merely a fintech story.
Bloomberg reported on September 23, 2026 that the Trump administration is considering joint ventures with private-sector stablecoin firms to expand dollar-denominated stablecoin usage internationally. Three federal agencies are involved in the discussions:
The policy lineage traces to January 23, 2025, when President Trump signed an executive order mandating the promotion of "lawful dollar-backed stablecoins." The GENIUS Act codified that directive into law six months later. Treasury Secretary Scott Bessent stated upon enactment that stablecoins "will buttress the dollar's status as the global reserve currency, expand access to the dollar economy for billions across the globe, and lead to a surge in demand for US Treasuries."
No specific partner countries or funding amounts have been disclosed. The deliberations remain at the exploratory stage, according to Bloomberg's sources, who requested anonymity because the talks are private.
The stablecoin market stood at $302.8 billion as of September 10, 2026, according to StablecoinBeat data. Market concentration is extreme:
| Stablecoin | Market Cap | Market Share | |---|---|---| | USDT (Tether) | $183.4B | 60.6% | | USDC (Circle) | $74.6B | 24.5% | | All others | $44.8B | 14.9% |
USDT and USDC together control 85.1% of supply. Dollar-pegged tokens account for 99.4% of total stablecoin capitalization, according to CoinPaprika data.
Tether's reserve composition, disclosed in its December 2025 attestation, showed $122.3 billion in U.S. Treasury bills — 83.1% of total reserves. Total direct and indirect Treasury exposure exceeded $141 billion by year-end, positioning Tether ahead of Germany ($109.8 billion) and Israel ($107.7 billion) in T-bill holdings among all sovereign and non-sovereign entities. Tether's CEO has stated the company expects to reach the top 10 T-bill purchasers globally in 2026.
The economic logic underpinning the overseas push is straightforward: every new dollar of stablecoin in circulation requires approximately one dollar in reserve assets, and the GENIUS Act channels those reserves toward short-term U.S. government debt.
The numbers frame the scale of the opportunity as follows:
At $2 trillion, stablecoin reserves would represent approximately 5% of total U.S. public debt. Net foreign investment in long-term U.S. securities ran at $1.75 trillion in the 12 months through July 2026. A tenfold stablecoin expansion would create a demand channel roughly equivalent to total annual foreign portfolio inflows.
David Sacks, former White House crypto and AI czar, stated in February 2025 that stablecoins could "extend the dollar's dominance internationally" and generate "trillions of dollars in additional demand for US government debt."
Separately from the government initiative, a consortium of 21 financial institutions announced plans on September 1, 2026 to incorporate a joint venture to issue a GENIUS Act- and MiCA-compliant USD stablecoin. The entity targets market launch in H1 2027.
The original 10 founding members (announced October 2025): Banco Santander, Bank of America, Barclays, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, MUFG Bank, TD Bank Group, and UBS.
Eleven additional members joined in 2026: Capital One, BBVA, Standard Bank, Lloyds Banking Group, Fidelity Investments, PNC Financial Services, Scotiabank, Wells Fargo, WisdomTree, Commerzbank, Crédit Agricole, Coöperatieve Rabobank, and Sirius International Holding.
The consortium's product will target wholesale, institutional, and retail markets, with euro-denominated and other G7 currency versions planned as near-term follow-ons. The entity is expected to be formally incorporated in H2 2026.
The timing is notable: banks are entering the stablecoin market just as the government signals intent to use stablecoins as a foreign policy instrument. Whether these efforts are coordinated or coincidental remains unclear from public disclosures.
The GENIUS Act established the first federal regulatory framework for payment stablecoins. Key provisions:
Multiple agencies are conducting parallel rulemaking. The FDIC approved a proposed rule on April 10, 2026 establishing requirements for FDIC-supervised issuers. The Treasury Department opened public comment on August 17, 2026 on issuance and offering provisions. The statutory deadline for primary regulations was July 18, 2026; final rules under the GENIUS Act take effect January 18, 2027, or 120 days after final regulatory publication.
On September 18, 2026, the OCC granted conditional national trust bank charters to three stablecoin-focused institutions: Agora, Catena, and Bastion. Agora's application had been pending since April. The charter permits stablecoin issuance, redemption, digital asset custody, and fiduciary advisory services. Final authorization is contingent on meeting OCC conditions; Catena and Agora must open within 18 months and raise capital within 12 months.
The overseas stablecoin push has an explicit competitive dimension. China's digital yuan (e-CNY) has grown over 800% since 2023, with cumulative transaction value exceeding $2.3 trillion by late 2025, according to Atlantic Council data.
Project mBridge — a cross-border CBDC settlement platform involving the People's Bank of China — reached $55.49 billion in transaction volume, a 2,500-fold increase over early-2022 pilots. The e-CNY accounted for over 95% of mBridge settlement volume.
The European Central Bank is running a 12-month digital euro pilot, with a potential launch window in H2 2027.
The dollar maintains 89.2% presence in global foreign-exchange transactions (one side of each trade), according to BIS data cited by CoinPaprika. The U.S. strategy effectively treats private-sector stablecoins as a faster, cheaper alternative to a sovereign CBDC — deploying existing market infrastructure rather than building new government systems.
The International Monetary Fund has raised repeated concerns about stablecoin proliferation in emerging markets. In a December 2025 report, the Fund warned that USD-pegged stablecoins could accelerate currency substitution, capital outflows, and financial system destabilization in vulnerable economies. IMF model simulations for small emerging markets showed domestic bank deposits falling sharply, bank net worth shrinking, credit spreads widening, and external shocks producing deeper recessions.
IMF First Deputy Managing Director Dan Katz delivered an August 7, 2026 speech at the University of Cape Town titled "Stablecoins: Promise, Risks, and Policy Choices for Emerging Markets," underscoring the Fund's concern that wider adoption could limit policymakers' control over domestic financial flows.
Separately, economist Ousmène Mandeng (OMFIF Senior Adviser, LSE Visiting Fellow) has challenged the Treasury demand thesis directly. Writing for OMFIF in August 2025, Mandeng argued that stablecoins may redistribute existing capital into Treasuries rather than generate net new demand — because many stablecoin transactions substitute for other dollar-denominated transactions that already involve Treasury securities as collateral or reserves. The distinction matters: substitution does not lower government borrowing costs; net new demand does.
The U.S. government is moving toward treating dollar stablecoins as instruments of monetary foreign policy. The combination of the GENIUS Act's reserve requirements, the OCC's chartering decisions, and the proposed overseas promotion program creates a coordinated infrastructure for extending dollar reach through private-sector tokens rather than a sovereign CBDC.
The arithmetic is compelling on paper: a $2 trillion stablecoin market, fully reserved in short-term Treasuries, would create a buyer equivalent to total annual foreign portfolio investment in U.S. securities. At a moment when the 10-year yield is above 5% and national debt stands at $40.1 trillion, that demand channel has obvious fiscal appeal.
Whether the thesis holds depends on the substitution question. If stablecoin adoption redirects existing dollar holdings into Treasuries, the net fiscal benefit is limited. If it onboards new dollar users — particularly in emerging markets where the IMF warns of currency substitution risks — the demand is genuinely additive, but at the cost of financial stability concerns in those markets.
The 21-bank consortium's entry adds institutional heft but also consolidation risk. If bank-issued stablecoins capture significant share from Tether and Circle, the competitive dynamics — and the reserve management practices — shift substantially.
No final decisions have been announced. The data suggests the direction, not the destination.