Nikolas Sargeant
Government officials in both the United States and South Korea have reached similar conclusions about stablecoins' impact on global currency dynamics: the digital assets will significantly strengthen US dollar dominance worldwide, though the two countries view this development very differently.
US Treasury Secretary Scott Bessent embraced this outcome Wednesday, declaring that President Trump's cryptocurrency push will "lock in" dollar supremacy through stablecoin adoption. Secretary Bessent has long been a supporter of cryptocurrency regulation even before his role as Treasury Secretary.
Bessent projected that US dollar-backed stablecoins could reach over $2 trillion in market capitalization within three years, up from roughly $240 billion currently. The Treasury Secretary's comments followed Senate passage of landmark stablecoin legislation, signaling federal support for dollar-denominated digital currencies as tools of economic influence.
This comes as the US Senate has passed the GENIUS stablecoin bill. They voted 68-32, overcoming cloture. The passing of this bill in the House and subsequent signature by Trump would be a major step towards stablecoin regulation and adoption in the US.
South Korea Sees Same Dollar Strengthening Effect
South Korea's central bank has reached the same analytical conclusion about stablecoins boosting dollar power, but views the development as problematic. Bank of Korea officials warned that even local Korean won-based stablecoins could paradoxically increase demand for US dollar stablecoins, undermining efforts to promote domestic currency use and prevent capital outflow.
The central bank cited substantial evidence of dollar stablecoin dominance in South Korean markets, with trading involving major US dollar stablecoins reaching 57 trillion won ($42 billion) on five main domestic exchanges in the first quarter alone. Officials expressed concern that this pattern would intensify regardless of local stablecoin initiatives.
Both countries' analyses point to the same fundamental dynamic: stablecoin adoption, whether dollar-denominated or in local currencies, appears to reinforce the US dollar's role in global digital finance. While American officials celebrate this as strengthening monetary leadership, South Korean policymakers worry about the implications for domestic economic sovereignty and capital controls.
