Stablecoin Bill Nears Senate Approval—Trump Insider Claims It Could Flood U.S. Treasuries With Trillions
Washington’s latest crypto play might just bail out the Treasury—how convenient. A stablecoin bill, backed by Trump adviser David Sacks, is reportedly on the fast track to Senate passage. If it clears? Brace for a tidal wave of capital rushing into U.S. debt instruments.
Wall Street’s been drooling over this one: legitimizing stablecoins could funnel institutional money into Treasuries like never before. Trillions, they say—because nothing solves a debt crisis like printing a new asset class to soak it up.
Of course, the usual suspects will call it ’innovation.’ Everyone else will recognize it as the Fed’s latest life raft—wrapped in blockchain packaging.
Trump Ties and Political Tension Cloud Stablecoin Bill Momentum
While the bill’s technical merits have drawn rare bipartisan support, controversy continues to swirl around potential conflicts of interest.
Critics point to the TRUMP family’s ties to World Liberty Financial, a crypto firm recently launching its stablecoin, USD1, which U.S. Treasuries and fiat reserves reportedly back.
The token has secured a $2 billion investment commitment from Abu Dhabi’s MGX fund via Binance, raising questions about whether the administration’s policy initiatives are aligned with private family investments.
Sacks, who says he divested $200 million in crypto holdings before joining the administration, declined to comment on whether Trump or his family stands to benefit from the bill’s passage.
Trump’s AI and Crypto Czar @DavidSacks confirmed he sold all direct crypto holdings before the President’s administration began.#DavidSacks #CryptoRegulationhttps://t.co/TpZaVpYl1J
When pressed on the ethics of presidential crypto ventures, he avoided specifics, instead emphasizing the bill’s transformative economic potential.
Still, the GENIUS Act’s path to final passage isn’t entirely smooth.
Senator Josh Hawley recently added a provision capping credit card late fees amendment that could alienate key financial industry backers and complicate the coalition needed to pass the bill.
Yield-Bearing Stablecoins Signal Industry Shift
Meanwhile, the broader stablecoin ecosystem is evolving rapidly. Once considered regulatory gray zones, yield-bearing stablecoins are gaining legitimacy under the Trump administration’s regulatory shift.
In February, the SEC approved such tokens as “certificates” governed under securities laws rather than banning them. This MOVE opened the door to compliant products offering interest to stablecoin holders, provided they meet disclosure, registration, and investor protection standards.
This move is backed by the growing momentum around the stablecoins. Yield-bearing stablecoins surged to $11 billion in circulation from just $1.5 billion at the start of 2024, now accounting for 4.5% of the total stablecoin supply.
Stablecoin supply reaches $200B, signaling increased liquidity across exchanges. Historical patterns suggest this could impact $BTC and broader #CryptoMarkets.#Blockchain #Stablecoinshttps://t.co/uiSRxnoEtz
Decentralized protocols like PENDLE have emerged as primary beneficiaries. Pendle, which allows users to lock in fixed yields or speculate on variable interest rates, currently holds nearly $3 billion in total value locked (TVL) from yield-bearing stablecoins, making up 30% of the sector’s TVL.
Stablecoins now represent 83% of Pendle’s total TVLup, up from less than 20% a year ago, while traditional assets like ETH have fallen to under 10%.
This shift indicates growing user preference for stablecoin-based yield opportunities at a time when traditional tokens remain volatile and the Federal Reserve maintains high interest rates.
While dominant, legacy stablecoins such as USDT and USDC still do not pass on yield to holders. With over $200 billion in circulation and Fed rates hovering at 4.3%, Pendle estimates that stablecoin holders forgo more than $9 billion in annual interest.
