Trump: Will not allow the dollar to decline, cryptocurrency is beneficial to the dollar

The Trump administration clearly views stablecoins as a tool to enhance the strength of the dollar and create demand for U.S. Treasury bonds, while opposing central bank digital currency (CBDC) concepts that may challenge the dollar's status.

According to a report by CCTV on July 19, local time on July 18, U.S. President Trump officially signed the "Guidance and Establishment of the U.S. Stablecoin National Innovation Act" (referred to as the "Genius Act") at the White House, marking the implementation phase of U.S. stablecoin regulatory legislation.

During the signing ceremony, Trump stated:

I promised that we would bring back freedom and leadership to America, making it the world’s cryptocurrency capital. Under my leadership, we have achieved this.

The signing of this act is expected to clear obstacles for the issuance and circulation of digital currencies—stablecoins—that are pegged to stable assets like the dollar, thereby enhancing market confidence and promoting industry growth. Trump emphasized that stablecoins represent "a revolution" in the fintech sector.

At the same time, Trump reiterated that he would not allow the dollar's status to decline and promised to sign legislation banning the emergence of central bank digital currencies (CBDCs). Since the beginning of this year, the dollar index has fallen from a high of 110 to around 98, a decline of over 10%.

Trump: Dollar Hegemony Cannot Be Shaken

In promoting cryptocurrency regulatory legislation, the core logic of the Trump administration is to use stablecoins issued by the private sector to strengthen, rather than replace, the dollar.

Trump stated that cryptocurrencies are beneficial for both the dollar and the nation. For cryptocurrencies, the "Genius Act" represents a "massive" validation.

In response to the dollar's weak performance this year, Trump emphasized:

We will not allow the dollar to decline. If the dollar loses its status as a reserve currency, it will be like America losing a war.

He stressed his determination to defend the dollar's status, stating:

The U.S. will never have a central bank digital currency (CBDC) issued by the Federal Reserve; I will soon sign a legislative draft to form a CBDC ban.

Analysts believe that Trump's series of statements clearly delineates the boundaries: support for private sector innovation linked to the dollar and backed by dollar assets, while firmly opposing any official digital currency that may reshape the power of currency issuance.

The underlying logic of this strategy is that as global users increasingly use stablecoins pegged 1:1 to the dollar for transactions or transfers, the issuers must purchase and hold a corresponding amount of dollar assets (such as U.S. Treasury bonds) as reserves.

The views of Trump's AI and cryptocurrency chief, David Sacks, corroborate this point, as he noted that the "Genius Act" will directly "create demand for (investment/holding) U.S. Treasury bonds." Thus, consolidating the global position of the dollar in the digital age.

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