Context and Impact
Eric Trump’s statement that “stablecoins will save the US dollar” centers on the argument that dollar-pegged stablecoins can strengthen the global position of the US currency. The premise is that as these digital tokens are adopted for cross-border payments and as a store of value, especially in countries with high inflation, they create additional international demand for dollar-linked assets, thereby reinforcing the dollar’s dominance. This view is shared by some financial leaders, who note that stablecoins could broaden the global reach of the dollar.
However, this perspective is met with significant criticism. Major financial institutions and economists highlight considerable risks. Widespread adoption of stablecoins could weaken the Federal Reserve’s control over monetary policy by dulling the effectiveness of its tools for managing the money supply and interest rates. There are also serious concerns about financial stability, including the potential for “runs” on stablecoins, their use for evading sanctions and other illicit activities, and the erosion of monetary sovereignty in other countries, leading to unintended dollarization.
This debate is directly relevant to the Trump family’s project, World Liberty Financial (WLFI), and its USD1 stablecoin, which has drawn scrutiny over potential conflicts of interest and is currently under public review.
Implications and Regulatory Landscape
The ongoing discussion and growth of stablecoins have tangible consequences for markets, regulators, and financial stability.
Monetary Policy and Financial Stability: The most significant implication for regulators is the potential impact on monetary control. If stablecoins become a major payment method outside the traditional banking system, they could complicate how central banks manage the economy . Furthermore, institutions like the Bank for International Settlements (BIS) point out that stablecoins fail key tests for being a reliable backbone of the monetary system, particularly regarding the “singleness” of money (always trading at par), “elasticity” (the ability to create money flexibly to support economic activity), and “integrity” (resistance to financial crime) .
Regulatory Response: In response to these risks, a global patchwork of regulations is emerging. The United States passed the landmark GENIUS Act in July 2025, establishing a federal framework that mandates stablecoins be fully backed by high-quality liquid assets like cash and short-term Treasuries, and subjects issuers to banking regulations . Other jurisdictions like the European Union (MiCA), Hong Kong, and Singapore have implemented their own regimes, often focusing on reserve requirements and consumer redemption rights. This regulatory divergence creates a complex environment for international issuers.
Risks for Linked Projects: For specific projects like World Liberty Financial, the political linkages intensify reputational and regulatory risks. Such ventures may face deeper scrutiny from lawmakers and regulators, which can impact market access and user trust.
In conclusion, while stablecoins present a potential technological innovation for payments, their ability to “save the US dollar” is a subject of intense debate. The future will hinge on the evolution of regulatory frameworks, the ability of stablecoins to overcome inherent financial stability risks, and the resolution of conflicts of interest surrounding politically connected projects. For market participants, monitoring regulatory developments and the specific progress of projects under review is essential.
