Is using stablecoins to boost demand for US Treasuries official policy, and does it involve XRP?

The full answer

What did the Treasury say about stablecoins and Treasuries?

On July 18, 2025, Treasury Secretary Scott Bessent issued a statement after President Trump signed the GENIUS Act [1]. He said the technology “will buttress the dollar’s status as the global reserve currency, expand access to the dollar economy for billions across the globe, and lead to a surge in demand for US Treasuries, which back stablecoins” [1]. He said the Act gives the stablecoin market the regulatory clarity “it needs to grow into a multitrillion-dollar industry,” and he called the signing “a seminal moment for digital assets and dollar supremacy” [1]. The statement sits on the Treasury’s own website, so the link between stablecoins and Treasury demand is stated by the US Treasury Secretary.

CoinPaprika reported that Bessent argues this demand could lower borrowing costs and help finance the federal deficit, and that he expects the sector to grow toward roughly $2 trillion over time [3]. Those two points come from CoinPaprika’s summary. The page on why the US government cares about demand for Treasuries covers the debt side of this.

Does the US have a federal stablecoin law, and what must reserves hold?

Yes. Latham’s US crypto policy tracker describes the GENIUS Act as the first federal US legislation on digital assets, setting a framework for payment stablecoins [2]. The Senate passed it 68 to 30 on June 17, 2025, the House passed it 308 to 122 on July 17, 2025, and President Trump signed it on July 18, 2025 [2].

Latham summarises the reserve rule this way: issuers must hold reserves backing their stablecoins at least one-to-one, made up only of specified assets including the US dollar and short-term Treasuries [2]. Issuers may not pay any interest or yield to holders, and issuers with no more than $10 billion outstanding may opt for a state regime that is “substantially similar” to the federal one [2]. According to CoinPaprika, eligible reserves include Treasuries maturing in 93 days or less, and the Act is expected to take effect on January 18, 2027 [3]. Whether final implementing rules exist is not established in the sources cited. Ripple’s September 11, 2026 guide likewise says the GENIUS Act will bring a more consistent federal framework “as its requirements take effect” [4]. The detailed rules are on the page about what reserves stablecoins must hold under the GENIUS Act.

How much do stablecoin issuers hold in Treasuries now, and how fast is it growing?

CoinPaprika reported that the whole stablecoin market was roughly $300 billion to $310 billion as of September 2026, citing Bloomberg, and that growth has slowed after a two-year climb [3]. It put Tether’s USDT at a market capitalisation near $183 billion on September 5, 2026, more than half of the market [3]. The mechanism is simple in CoinPaprika’s words: dollar-backed tokens hold US Treasuries as reserves, so a larger stablecoin market would buy more government paper [3].

Tether reported $141 billion in US Treasury exposure in its attestation for the fourth quarter of 2025, a figure that combines direct holdings with reverse repurchase agreements, according to CoinPaprika [3]. That is one issuer’s own report. No source gives a sector-wide total of Treasuries held by all issuers, or a measured growth rate for that total, as of September 30, 2026.

For the forward view, Standard Chartered analysts estimate stablecoin issuers could generate $800 billion to $1 trillion in additional Treasury bill demand, assuming the market doubles to about $2 trillion by the end of 2028, as reported by CoinPaprika [3]. CoinPaprika calls this a forward-looking scenario, not a current figure [3]. Whether that amount is large next to total government borrowing is the subject of could stablecoins help America’s debt problem.

Do stablecoins draw deposits away from banks, and who loses?

Whether money moves from bank deposits into stablecoins, and who would lose if it did, is not established by the sources cited (see the open items). What the sources do show is that interest on stablecoin balances is contested in Congress. According to Latham, the GENIUS Act already bars issuers from paying interest or yield to holders [2]. A Senate Banking Committee draft of January 12, 2026 went further, prohibiting digital asset service providers from offering interest or yield to users for simply holding stablecoin balances [2]. The committee’s May 12, 2026 text kept a compromise that prohibits interest or yield on idle balances while permitting activity-based rewards [2]. On May 14, 2026 the committee advanced the CLARITY Act 15 to 9, and the two Democrats who joined said their votes did not guarantee support on the Senate floor [2].

The sources do not say these yield limits were written to protect bank deposits, so this page does not claim that motive. The comparison between bank money and stablecoins is covered in tokenized bank deposits versus stablecoins and XRP, and the bill’s status in what happened to the CLARITY Act.

Where does RLUSD fit?

Ripple says RLUSD, launched in December 2024, is issued by Standard Custody & Trust Company, a Ripple subsidiary, under a limited-purpose trust company charter granted by the New York Department of Financial Services [4]. Ripple says RLUSD’s reserves are held in cash, short-term US Treasuries and cash equivalents, and that it has engaged BNY Mellon as a reserve custodian [4]. Ripple received conditional approval from the OCC in late 2025 to set up Ripple National Trust Bank; Ripple itself calls this “one step in a multi-stage federal chartering process, not a completed charter” [4].

Because its reserves include Treasuries, RLUSD growth feeds the same mechanism Bessent described. For the product itself see what is RLUSD, and for the reserve income see who earns the interest on RLUSD’s reserves.

Does any of this involve XRP?

Bessent’s statement names stablecoins, the dollar and Treasuries; it does not name XRP [1]. The mechanism runs through the reserves that back stablecoins [2][3]. The closest link in the sources is a company product, not government policy: Ripple said on April 1, 2026 that Ripple Treasury shows XRP and RLUSD balances inside the same account structure as cash [5]. How XRP might relate to the dollar strategy is taken up in does XRP conflict with US dollar dominance.

What is the strongest case against the Treasury-demand story?

The numbers so far are far below the ambition. CoinPaprika reported the market stalled near $300 billion in September 2026, against Bessent’s reported expectation of roughly $2 trillion, and said the Standard Chartered estimate “depends on rapid growth that has not yet arrived” [3]. CoinPaprika gave an expected effective date of January 18, 2027 for the law [3]. Final reserve rules were not found in the sources cited. On XRP specifically, the case against any official role is set out in has the US government officially chosen XRP for any role.