Crypto czar David Sacks sees stablecoins creating ‘trillions’ in demand for Treasuries – Ledger Insights

Yesterday White House crypto and AI czar, David Sacks, held a press conference to announce that Agriculture and Finance/Banking Committees of both the Senate and House would be working together on digital asset legislation. The Chairs of all four committees joined him. For some time, many have noted that the demand for Treasuries created by stablecoins could potentially aid government funding. That point was not lost on Mr Sacks.

“Stablecoins have the potential to ensure American dollar dominance internationally to increase the usage of the US dollar digitally as the world’s reserve currency, and in the process create potentially trillions of dollars of demand for US Treasuries, which could lower long-term interest rates,” said Mr Sacks.

Earlier in the day Senator Hagerty introduced the GENIUS stablecoin Bill. During the press conference, Senator Tim Scott, who chairs the Senate’s Banking Committee, said he hoped the GENIUS Bill and a digital assets Bill would be ready for President Trump’s signature within 100 days.

Mr Sacks highlighted the need for regulatory clarity and mentioned the problem of crypto de-banking.

“We want that value creation to happen in the United States rather than giving it away to other countries. This will also, I should add, be much better for consumer protection,” he said.

“Because it’s easier for regulators to supervise an activity when it’s onshore. And it’s probably not a coincidence that the single biggest fraud in the history of crypto, which was FTX, was based in The Bahamas.”

Specific crypto regulatory plans

Last year the House passed the FIT 21 Bill for digital asset regulation. While it had bipartisan support, we’d note there were some genuine flaws. For example, in order to be classified as a commodity (which does not require disclosures), the token issuer would have to notify the SEC about how it was decentralized. The SEC would have 60 days to respond.

If thousands of existing crypto tokens made such a declaration simultaneously, it would be impossible for the SEC to respond in time, resulting in the tokens being classified as commodities. That could expose consumers to higher risks. However, there’s a simple fix to this – be more flexible about the 60 day response time when the Act first comes into force.

When asked by the press, Congressman French Hill who chairs the House Finance Committee said the new digital assets Bill will share the basics with FIT 21 with some minor amendments. The House stablecoin bill is likely to be similar to the current Senate GENIUS Bill, which itself has been informed by earlier House Bills.

Senator Tim Scott who Chairs the Senate Banking Committee said the Senate would “harmonize” FIT 21, or rather “the parts that we see as a path forward to a signature into law.”

While Chair Scott wants to see both Bills clear the Senate in 100 days, there’s an issue that could slow things down. GT Thompson, who Chairs the House Agriculture Committee, noted that education takes time. There are many new members of Congress and crypto is not a topic that’s easy to get up to speed on.

Bitcoin Reserve v Sovereign Wealth Fund

A member of the press asked David Sacks about the Bitcoin Reserve and a potential cross over with the Sovereign Wealth Fund. Mr Sacks confirmed that a Bitcoin Reserve would be considered once the White House digital assets working group is in place. The Trump executive order on the topic said the Reserve was likely to incorporate seized assets. Regarding the Sovereign Wealth Fund, Mr Sacks said,

“I think the concept of the Sovereign Wealth Fund is a little separate, and you’d have to talk to soon-to-be Secretary Lutnick about that.”