U.S. Treasury Secretary Scott Bessent delivered a firm defense of the GENIUS Act during a Senate hearing this week, framing the legislation as a pivotal step in modernizing America’s financial system and cementing U.S. leadership in the fast-growing stablecoin market. His testimony comes as lawmakers intensify oversight of digital assets amid rapid adoption and rising transaction volumes.


Why the GENIUS Act Matters Right Now

The GENIUS Act establishes the first comprehensive federal framework for regulating U.S. dollar-backed stablecoins. These digital assets, designed to maintain a one-to-one peg with the dollar, now play a central role in global payments, crypto trading, and cross-border settlements.

According to Treasury data presented at the hearing, the global stablecoin market has surpassed $165 billion in circulation, with U.S. dollar-pegged tokens accounting for nearly 99% of total volume. Monthly transaction volumes now exceed $4 trillion, rivaling major card networks in raw settlement value.

Bessent emphasized that without clear federal rules, the U.S. risks losing market share to offshore jurisdictions that are moving faster to regulate and attract digital asset firms.


Backing Stablecoins With Real Assets

A core provision of the GENIUS Act requires stablecoin issuers to maintain 100% reserves in high-quality liquid assets, including U.S. Treasury bills, cash, and overnight repurchase agreements. Treasury estimates show that regulated stablecoin issuers could generate $900 billion to $1.2 trillion in Treasury demand by 2030 if adoption continues at its current pace.

That demand could materially support government financing. Treasury officials noted that stablecoin reserves already hold more short-term U.S. Treasuries than many foreign governments, placing them among the largest non-sovereign holders of U.S. debt.


Consumer Protection and Market Stability

During the hearing, Bessent pointed to recent industry failures as proof of why regulation is necessary. Unregulated or under-collateralized stablecoins have collapsed in past years, wiping out billions in market value and damaging investor trust.

Under the GENIUS Act, issuers must submit to regular audits, public reserve disclosures, and federal supervision, significantly reducing systemic risk. Treasury modeling suggests these measures could cut stablecoin-related liquidity shocks by more than 60% during periods of market stress.


Economic Impact and Fintech Growth

Beyond risk reduction, the law is designed to unlock growth. Treasury projections estimate that regulated stablecoins could lower cross-border payment costs by 30% to 50%, particularly for remittances and small-business transactions.

U.S. fintech employment tied to blockchain and digital payments has already grown over 18% year-over-year, and Treasury officials expect that figure to accelerate as regulatory clarity attracts institutional capital back into U.S. markets.


Political Debate Still Simmering

While the GENIUS Act passed with bipartisan support, the Senate hearing made clear that debate isn’t over. Some lawmakers raised concerns about anti-money laundering enforcement, national security risks, and the speed of adoption.

Bessent responded that the law strengthens oversight rather than weakening it, giving regulators clearer authority to monitor transactions, enforce sanctions compliance, and shut down bad actors.


The Bigger Picture for the U.S. Dollar

Perhaps the strongest argument made during the hearing was geopolitical. Treasury analysis shows that over 70% of stablecoin usage occurs outside the United States, effectively exporting dollar liquidity worldwide. Bessent argued that regulated stablecoins extend U.S. dollar influence at a time when rival economies are experimenting with alternative payment systems.

In a digital economy, currency leadership doesn’t stop at paper, Bessent told senators, signaling that stablecoins may become a strategic tool for maintaining dollar dominance.


What Comes Next

With implementation rules expected later this year, federal agencies are now working with banks, fintech firms, and payment providers to operationalize the law. Treasury officials expect the first wave of fully compliant U.S. stablecoins to launch within six to nine months.