The U.S. is turning stablecoins into a weapon for maintaining the dominance of the dollar.

What's going on?

According to a Bloomberg report on Wednesday, the Trump administration is considering starting promoting US dollar-linked stablecoins in foreign markets through joint ventures between state and private companies.

Several government agencies may have been drawn into the scheme, including the U.S. Treasury Department, State Department and the US International Development Finance Corp., a public-private partnership that invests in projects supporting American foreign policy objectives led by Ben Black, son of Apollo Global Management co-founder Leon Black.

The information comes from someone familiar with the plot, who asked not to be identified.

How does stablecoin work?

A stablecoin is a cryptocurrency designed to maintain a 1:1 constant value with one currency, typically achieved by holding an equal amount of cash and short-term government debt as collateral.

This mechanism ties in with the GENIUS Act that Trump signed last year, which requires stablecoin issuers to back up all tokens with cash and short-term government bonds. The more stablecoins circulate overseas, the more they have to invest in US Treasury debt.

Why is the U.S. government interested?

The goal, according to the sources, was twofold: keep foreign users locked into dollars and create new buyers for the US government.

Treasury Secretary Scott Bessent has previously outlined this concept, suggesting that stablecoins are a tool to bolster the dollar's position rather than a threat, while Deputy Secretary of the Treasuries Francis Brooke said this week that current issuers already hold treasury bills worth nearly 200,000 million dollars, a figure executives would like to see rising.

Who are you competing with?

This is a digital currency war with multiple competitors, China pushing the digital yuan, European Central Bank pushing for the digital euro and BRICS interested in exploring possibilities as well.

But these major competitors don't want the private sector to be involved in monetary policy; China has officially banned stablecoins, and ECB President Christine Lagarde opposed euro-linked stablecoins as an ineffective way of extending the influence of the euro around the world.

How does this affect the average user?

If you send money home from abroad, buy things online that cost dollars or live in a country where the local currency is rapidly depreciating, stablecoins are a great tool for financial stability. As Washington becomes a business partner of this direct payment channel, U.S. foreign policy and dollar strategy will be embedded into the infrastructure that ordinary people use to transfer and pay each other.

For users in Thailand and Myanmar who are familiar with the use of stablecoin dollars for cross-border payments, increased U.S. government involvement could lead to wider adoption on a global scale.