Bessent says digital assets could shore up U.S. dollar dominance

Speaking at Ripple's Swell conference with CEO Brad Garlinghouse, Bessent argued that the power behind the world's reserve currencies historically derived from military strength, but that is increasingly shifting toward technological leadership.

"We will keep our military umbrella, but I think more and more it's becoming a technology umbrella," Bessent said, pointing to the growing divide between U.S. and Chinese technology ecosystems, where countries and companies face choices over whose artificial intelligence systems and semiconductor technology to adopt.

Bessent said he sees digital assets as part of that competition, with the financial infrastructure countries choose influencing the dollar's reach. "I think that digital assets are going to be no different, and we are going to win in the digital asset stack, and that's gonna continue to fortify the [U.S.] dollar," he said.

The administration of U.S. President Donald Trump has already secured passage of the GENIUS Act, which established a federal regulatory framework for stablecoins. Bessent argued that stablecoins could reinforce the dollar's position by expanding access to U.S. currency in countries where local currencies face inflation or sharp swings in value. More than 90% of stablecoins are backed by U.S. dollars, he said, and their issuers often hold U.S. government securities as reserves. As adoption grows, demand for those assets could rise, creating another source of financing for the federal government.

However, the White House's broader push to regulate crypto markets suffered a setback after Congress failed to pass the Clarity Act, which would have established a federal framework for the industry. Bessent called the failure a disappointment but said the Treasury Department could work with regulatory agencies like the Securities and Exchange Commission and Commodity Futures Trading Commission to advance oversight through agency action.

"At Treasury, we have a lot of convening powers," he said, describing the SEC and CFTC as "great partners" in forming a regulatory framework that could serve as a model for other countries.

Bessent also addressed the industry's concerns about debanking, where financial institutions cut off services to crypto businesses. He said regulatory safeguards could still offer protection. "I think we can set up regulatory best practices, guardrails that will prevent that from happening again," Bessent said.