Treasury's Bessent: US will prevail in digital asset race despite legislative delay

On Tuesday, U.S. Treasury Secretary Scott Bessent remarked that U.S. leadership in digital assets could shore up the dollar's global standing, even as Congress has stalled on the market-structure legislation designed to oversee them.

Bessent made the comments at Ripple's Swell conference in New York, alongside CEO Brad Garlinghouse. He argued that the basis of reserve-currency strength is changing. For most of recent history, he noted, the dollar's supremacy depended mainly on military power.

"We will keep our military umbrella, but increasingly, it becomes a technological umbrella," he said.

He placed digital assets alongside artificial intelligence and semiconductors as sectors where the U.S. and China vie to construct leading infrastructure. He also indicated that the financial systems nations select will influence the dollar's influence.

The clearest connection he highlighted involves stablecoins, tokens tied to the dollar whose issuers generally hold reserves comprising U.S. Treasury securities. According to Bessent, stablecoins could provide individuals in nations with high inflation or unstable currencies easier entry to dollars.

According to CoinGecko, more than 98% of stablecoins are dollar-denominated, led by Tether's USDT and Circle's USDC. Bessent gave his own estimate above 90%. The precise figure varies, but the dollar unequivocally leads the category.

Secretary Scott Bessent stated the Treasury is acting on crypto regulation regardless of Congress. He said they will "bring the SEC and CFTC together to close the gaps through regulation."

Bessent has further contended that stablecoin reserves might boost demand for Treasury debt. In the past year, he proposed that stablecoins could create $2 trillion in short-term demand for Treasuries and bills. That forecast relies on the speed of stablecoin supply growth, applicable reserve regulations, and issuers' investment choices.

This week, bitcoin was trading near $80,000 to $81,000 before the Federal Reserve's decision. Bitcoin proponents have consistently argued that a neutral, non-issuer asset provides a distinct option from dollar-pegged tokens.

Broader crypto legislation trends

The regulatory environment is more unclear. The Comptroller of the Currency has completed its rule to implement the GENIUS Act, establishing requirements for payment stablecoin issuers. The federal framework becomes effective on January 18, 2027.

The wider CLARITY Act, intended to create market-structure rules for digital assets, fell short in a Senate procedural vote on September 15, 49 to 50, lacking the required 60 votes. Disagreements involved ethics provisions concerning federal officials' crypto holdings and stablecoin yield.

Banks and the White House disagreed over those yield conditions.

Treasury Bessent's willingness to work around Clarity Act failure

Bessent described the setback as disappointing. He stated that Treasury could collaborate with the SEC and the CFTC to close regulatory gaps. "At Treasury, we have a lot of convening powers," he said, calling the agencies "great partners."

He also mentioned that regulators could establish guardrails to stop banks from cutting off crypto firms, a practice called debanking.

"I think we can set up regulatory best practices, guardrails that will prevent that from happening again," he said.

Those comments did not outline a formal plan, working group, or schedule. Regulatory action can clarify rules under existing authority, but it does not have the durability of a congressional act and could be undone by a future administration.

According to TD Cowen, next week's midterm elections could cause further delay for the CLARITY Act.