CryptoSlate
Circle president Heath Tarbert told Congress on September 2 that placing stablecoin infrastructure under US rules could reinforce the network effects backing the dollar's global role. The testimony framed stablecoin and digital-asset legislation as a tool of dollar statecraft, with regulated dollar tokens extending US payment reach even as the official reserve share remains a separate contest. A Treasury Borrowing Advisory Committee analysis found that T-bills already represent 53% of Tether and Circle assets, with their combined bill holdings up $70 billion since 2022. Even after that run, stablecoin issuers still hold less than 1% of Treasuries outstanding.
Why it matters
The dollar accounted for 57.13% of allocated global foreign exchange reserves in Q1 2026, up from 56.42% in Q4 2025, per the IMF's latest COFER brief. Roughly half of that quarterly move came from exchange-rate valuation effects, not active allocation. The Bank for International Settlements estimates that around 98% of stablecoin value is denominated in dollars, a structural advantage no other currency enjoys in token markets. Regulated US stablecoin rails can therefore extend that advantage into private stores of value and payments without directly reshaping central bank reserve choices.
Market impact
The GENIUS Act, enacted in July 2025, requires one-to-one permitted reserves, par redemption, disclosures, supervision and financial-crime compliance. General effectiveness is expected on January 18, 2027 unless final rules pull the date forward. Fed staff pegged stablecoin market capitalization at $317 billion on April 6, 2026, more than 50% above early-2025 levels. USDC already holds high-quality reserves equal to its liabilities, while USDT reports total reserves at 1.04x liabilities but high-quality reserves at roughly 0.74x. CLARITY, now moving through the Senate after a 15-9 Banking Committee vote and a July 22 merged text, addresses market structure rather than reserve allocation. The combined effect is more regulated T-bill demand from a sector that already absorbed $70 billion in bills since 2022, with supervision narrowing the gap between issuers like Circle and Tether.
Frequently asked questions
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What did Circle's president tell Congress about stablecoins?
Heath Tarbert told Congress on Sept. 2 that placing stablecoin infrastructure under US rules could reinforce the network effects backing the dollar's global role, framing the GENIUS Act as a tool of dollar statecraft.
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How much do stablecoin issuers hold in US Treasury bills?
T-bills represent 53% of Tether and Circle assets combined, with their bill holdings up $70 billion since 2022. Stablecoin issuers still hold less than 1% of all Treasuries outstanding.
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What does the GENIUS Act require from stablecoin issuers?
The GENIUS Act, enacted July 2025, requires one-to-one permitted reserves, redemption at par, disclosures, supervision, and financial-crime compliance. General effectiveness is expected Jan. 18, 2027.
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How large is the stablecoin market?
Federal Reserve staff estimated stablecoin market capitalization at $317 billion on April 6, 2026, more than 50% above early-2025 levels.
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How do USDC and USDT reserves differ in quality?
USDC holds high-quality reserves equal to its stablecoin liabilities, while USDT reports total reserves at 1.04x liabilities but high-quality reserves at only about 0.74x liabilities.
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