Treasury Secretary Scott Bessent predicted Friday that stablecoins will unlock trillions of dollars in demand for U.S. treasuries in the near future.

What Happened: During an interview with Bloomberg Television, Bessent was asked about the impact stablecoins could have on the strength of the dollar.

“What we want to do is apply the highest U.S. regulatory and AML [anti-money laundering] standards to digital assets, especially stablecoins,” Bessent replied. “I’ve seen estimates that just over the short term, stablecoins could create two trillion of demand for U.S. treasuries and treasury bills,”

Stablecoins have rapidly ascended as one of the biggest holders of U.S. treasuries in recent years, with Tether (CRYPTO: USDT), issuer of the world’s largest stablecoin, disclosing $120 billion in exposure to U.S. debt in the first quarter.

See Also: White House Says Gold Reserves May Be Used to Purchase Bitcoin

Why It Matters: Bessent’s comments aligned with the views of David Sacks, the White House cryptocurrency and AI advisor. Sacks had projected that the impending stablecoin legislation could unlock trillions for U.S. treasuries “practically overnight.”

The Senate recently passed a key vote advancing the GENIUS Act, also known as the stablecoin bill. This legislation is expected to establish a legal framework for the nearly $250 billion worth of the unregulated sector.

Meanwhile, reports surfaced that U.S. banking behemoths, including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo, were exploring the possibility of issuing a dollar-pegged stablecoin to counter the increasing competition from the cryptocurrency sector. However, when approached by Benzinga, these firms declined to comment.

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