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U.S. Legislation Clears Way for Stablecoins — But Raises Conflict Questions
The recent legislation that paves a path for U.S.-approved stablecoins has been hailed by some as a step toward clearer cryptocurrency regulation and broader adoption. Yet critics warn the bill leaves a notable gap: it does not include measures to bar the president, members of his family, or affiliated companies from deriving financial benefit from the new stablecoin framework. That omission has reignited debate about conflicts of interest and the integrity of digital-asset policymaking.
Political scrutiny and financial implications
High-profile senators including Elizabeth Warren, Chris Van Hollen, and Ron Wyden have pushed regulators to scrutinize the law’s potential for self-dealing. In early August they wrote to the Office of the Comptroller of the Currency expressing concern that the legislation failed to address clear conflicts tied to the Trump family’s expanding crypto businesses. Public trust in stablecoin regulation hinges on transparent safeguards against insider advantage, the lawmakers argue.
Critics point to estimates that Donald Trump’s crypto-linked net worth has increased by roughly $2.4 billion since he entered the market in 2022. Meanwhile, President Trump and his family’s advisers promote stablecoins as a tool to strengthen the U.S. dollar’s international role, even as analysts highlight the dollar’s vulnerabilities amid Federal Reserve rate cuts and rising national debt.
Market forecasts: Citigroup’s bullish view vs. JPMorgan’s caution
Institutional forecasts for stablecoin market cap diverge sharply. Citigroup forecasts a dramatic rise, projecting stablecoin adoption could push market capitalization from about $240 billion today to more than $2 trillion by 2030. The bank’s base-case scenario shows supply reaching $1.6 trillion, while a more optimistic outlook tops $3.7 trillion.
Citigroup attributes the expansion to clearer regulation, greater institutional participation, and growing public-sector engagement. By contrast, JPMorgan’s analysis is more restrained: it forecasts stablecoins growing to roughly $500 billion by 2028, noting limited mainstream use and an ecosystem still centered on trading and collateral rather than payments.
Impacts on banks, Treasuries, and payments
Stablecoin issuers already hold significant sums in U.S. Treasuries — Tether and other major issuers maintain tens of billions in government debt. Citigroup warns that by the decade’s end stablecoin issuers could become some of the largest holders of U.S. Treasuries, a shift that would reshape government debt markets and liquidity.
The bank also flagged the risk of "deposit substitution," where stablecoins siphon deposits from traditional banks and alter lending and payment dynamics. Conversely, proponents argue stablecoins could capture up to $1 trillion in annual payment volume by 2030, transforming settlement infrastructure and improving cross-border transactions.
Where the debate goes from here
As Washington advances stablecoin legislation under a pro-crypto administration, policymakers will have to balance innovation, monetary stability, and market integrity. Questions about who benefits financially from new rules are fueling calls for tighter conflict-of-interest provisions and more granular regulatory guardrails.
For crypto users, institutions, and regulators, the next 12–24 months will be critical: clear rules could unlock massive stablecoin adoption and new payment rails, while lingering uncertainty could leave the market far smaller and more fragmented than bullish forecasts suggest. The policy choices made now will shape whether stablecoins strengthen the dollar and improve global finance — or primarily enrich a few well-positioned players.
Source: cryptonews
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