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Trump’s ‘Crypto Czar’ David Sacks Confident Stablecoin Bill Will Pass: What This Means for the Market

Legislation Could Attract “Trillions of Dollars” to US Treasury Bonds

David Sacks, US President Donald Trump’s top adviser on crypto and artificial intelligence, has stated that the administration expects the stablecoin bill to clear the Senate with bipartisan backing. The GENIUS Act, being promoted as the first comprehensive federal legal framework for stablecoins, could pave the way for a multi-trillion dollar market of dollar-backed digital assets. Against the backdrop of growing yield-bearing stablecoins, the traditional banking sector is actively pushing back, concerned about its business model and profitability.

Stablecoin Bill Nears Historic Passage

“We have every expectation now that it’s going to pass,” Sacks told CNBC on May 21, following a key procedural vote that saw 15 Democrats join Republicans to clear the filibuster threshold. The Senate vote concluded 66-32 in favor of advancing debate on the GENIUS (Guiding and Establishing National Innovation for US Stablecoins) Act.

This bill represents the most advanced federal effort yet to establish a legal framework for dollar-pegged digital assets. Sacks emphasized the potential economic significance of the law, stating that it could trigger “trillions of dollars” in demand for US Treasurys by unlocking stablecoin growth under clear rules.

“We already have over $200 billion in stablecoins — it’s just unregulated,” he added. “If we provide legal clarity, we create enormous demand for Treasurys practically overnight.”

This statement reflects the Trump administration’s strategic vision regarding the role of stablecoins not only for the crypto industry but for the US financial system as a whole. Regulated stablecoins backed by Treasury bonds could significantly increase demand for US government debt, potentially lowering borrowing costs for the government.

Controversies Surrounding the Trump Family and Crypto Interests

The stablecoin bill’s progress comes despite controversy surrounding the Trump family’s crypto dealings. Critics have raised concerns that the administration benefits from the legislation, given its ties to World Liberty Financial, a crypto firm backed by Trump family members that recently launched a stablecoin, USD1.

The token is backed by US Treasurys and dollar deposits and has received a $2 billion investment commitment from Abu Dhabi’s MGX fund via Binance. The launch of USD1 shortly before the advancement of stablecoin legislation has raised questions about potential conflicts of interest.

Sacks, who disclosed the sale of $200 million in crypto-related holdings before joining the White House, declined to comment on whether the president or his family may financially gain from the bill’s passage. This refusal to comment has amplified critics’ concerns about the potential influence of personal financial interests on policy formation.

Despite momentum, final passage is not guaranteed. Senator Josh Hawley has added a controversial provision to the bill that would cap credit card late fees, a move that could cost the legislation support from financial industry allies, potentially complicating its passage through the final legislative hurdles.

Banks Panicking: The Threat from Yield-Bearing Stablecoins

In a May 21 post titled “The Empire Lobbies Back,” New York University professor Austin Campbell said the US banking industry is “panicking” over the rise of yield-bearing stablecoins, which threaten their profit model.

Campbell criticized the banking lobby for pressuring lawmakers to defend their interests and block competition from interest-paying stablecoins. He argued that banks rely on fractional reserve practices to profit while offering low returns to depositors, and fear stablecoins may expose and disrupt that system.

As reported by Cointelegraph, the US Securities and Exchange Commission in February approved the first yield-bearing stablecoin security by Figure Markets. According to a May 21 report from Pendle, yield-bearing stablecoins have soared to $11 billion in circulation since January 2024, representing 4.5% of the total stablecoin market.

“Traditional banks see yield-bearing stablecoins as an existential threat,” explains Maria Johnson, a financial analyst and digital currency expert. “Stablecoins not only offer an alternative to bank deposits but can potentially provide higher yields with lower overhead costs. This is a direct challenge to a business model that has brought banks stable profits for decades.”

Global Implications and Regulatory Outlook

The passage of the GENIUS Act could have far-reaching implications not only for the US but for the global cryptocurrency landscape. Establishing a clear regulatory framework for stablecoins in the world’s largest economy may set a precedent for other jurisdictions.

“Legitimizing stablecoins through federal legislation is a critical step for institutional adoption,” notes Alex Tapscott, author of “Blockchain Revolution.” “This could open doors for broader use of stablecoins in international trade, cross-border payments, and even in traditional financial instruments.”

In parallel with US efforts, other countries are also advancing in stablecoin regulation. Hong Kong recently passed a stablecoin bill and plans to open licensing by year-end. The European Union has included stablecoin regulation in its Markets in Crypto-Assets (MiCA) framework. These global trends indicate growing recognition of the importance of stablecoins in the future financial architecture.

A Turning Point for the Financial System?

As the GENIUS Act approaches possible passage, many experts see this as a potential turning point for the interaction between traditional finance and the cryptocurrency industry.

“We are witnessing the beginning of a fundamental transformation in how money functions in the digital age,” believes John Murphy, a former Federal Reserve employee, now a fintech strategy consultant. “Regulated stablecoins may become the bridge that finally connects blockchain’s innovative potential with the stability and trust of the traditional financial system.”

For the crypto industry, the passage of the bill could mean an exit from the regulatory gray zone that has long constrained the potential of stablecoins. For traditional financial institutions, it’s a signal to adapt or risk being left behind in the changing financial landscape.

While support for the bill grows from both sides of the political spectrum, the final outcome and exact details of the law remain uncertain. However, Sacks’ statement about “every expectation” of the bill’s passage indicates a high level of confidence from the Trump administration that stablecoins will soon receive long-awaited legal clarity in the United States.

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