Crypto Czar David Sack: Stablecoin Bill Could Unlock Trillions in U.S. Treasury Demand

The U.S. Senate’s advancement of the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) on May 20, 2025, has sparked optimism in the crypto industry, with David Sacks, President Donald Trump’s AI and Crypto Czar, highlighting its potential to create “trillions of dollars in demand” for U.S. Treasuries. In a May 21 CNBC interview, Sacks emphasized the bill’s bipartisan support and its role in strengthening the U.S. dollar’s dominance through stablecoin regulation. However, a controversial amendment might complicate the bill’s path to final approval.

GENIUS Act’s Potential to Boost Treasury Demand

The GENIUS Act introduces a critical framework for stablecoin issuance, requiring issuers to maintain a 1:1 reserve ratio backed by high-quality assets, including U.S. currency, Federal Reserve notes, insured demand deposits, Treasury bills with maturities of 93 days or less, repurchase agreements backed by short-term Treasuries, money market funds investing in these assets, or central bank reserves. This provision directly ties stablecoin issuance to U.S. Treasuries, potentially creating a significant new demand source for government debt.

The global stablecoin market, valued at around $245.43 billion as of the press time on May 22, 2025, is dominated by major players like Tether (USDT) at $152.81 billion and Circle’s USDC at $60.72 billion, according to DefiLama. According to a report by Bernstein, stablecoin issuers already rank as the 18th-largest holder of U.S. Treasuries. If issuers comply with the GENIUS Act’s reserve requirements, a substantial portion of these reserves would be held in short-term Treasuries, further driving demand for U.S. debt. Citibank analysts project the stablecoin market could reach $3.7 trillion by 2030, suggesting that, at scale, the legislation could channel hundreds of billions—or potentially trillions—into Treasuries, assuming issuers allocate a significant share of reserves to these assets.

David Sacks underscored this potential in his CNBC interview, stating, “We already have over $200 billion in stablecoins — it’s just unregulated,” Sacks told CNBC’s “Closing Bell Overtime.” He argued that GENIUS Act would provide legal clarity for the stablecoin market, encouraging further growth and institutional adoption. “If we provide the legal clarity and legal framework for this, I think we could create trillions of dollars of demand for our Treasuries practically overnight, very quickly,” Sacks said. The Treasury Borrowing Advisory Committee (TBAC), in a report issued in April 2025, echoed this view, noting that stablecoin expansion under such a framework would create “an additional and growing source of demand for Treasuries.” The report highlighted that the requirement for issuers to hold Treasuries with maturities under 93 days could shift debt holdings toward shorter terms, enhancing liquidity in the Treasury market while supporting financial stability.

Bipartisan Progress and Political Challenges

The GENIUS Act cleared a Senate cloture vote on May 20, 2025, with 15 Democrats joining Republicans to achieve the 60-vote threshold, signaling strong bipartisan support. The bill now faces further debate and potential amendments before a final Senate vote and submission to the House. Sacks expressed confidence in its passage, stating, “We have every expectation now that it’s going to pass.”

However, a controversial amendment proposed by Senator Josh Hawley (R-Mo.) threatens to derail progress. The amendment, which caps credit card interest rates at 10%, has drawn criticism from the American Bankers Association (ABA). The ABA warns that it could increase fraud risks, stating, “Many consumers who rely on credit cards would be forced to turn to riskier alternatives like pawn shops, auto title lenders, loan sharks, or unregulated online lenders.” Though unrelated to stablecoin regulation, this controversial addition to the GENIUS Act has raised concerns among banking allies, potentially jeopardizing bipartisan support for the legislation.

Stablecoins and the U.S. Dollar’s Digital Dominance

Stablecoins have emerged as a cornerstone of the crypto economy, facilitating $28 trillion in transactions in 2024, surpassing the combined volume of Mastercard and Visa, according to Deutsche Bank. Sacks highlighted their role in modernizing payments, noting, “Stablecoins offer a new, more efficient, cheaper, smoother payment system — new payment rails for the U.S. economy. It also extends the dominance of the dollar online.” By anchoring stablecoins to U.S. Treasuries, the GENIUS Act could reinforce the dollar’s position as the world’s reserve currency, a priority for lawmakers seeking to maintain U.S. financial leadership.

As the stablecoin market grows, the GENIUS Act could set a precedent for integrating digital assets into the U.S. financial system. With Bitcoin trading at $110,745 and Ethereum at $2,667 as of press time on May 22, 2025, stablecoins remain a stable anchor in a developing market, making their regulation a critical step for both innovation and financial stability.