‘Bitcoin, it just seems like a scam,” remarked Donald Trump back in 2021. Yet Trump went on to run for president again on a pro-crypto platform, promising attendees of the 2024 Bitcoin conference in Nashville that he would make America “the crypto capital of the planet.” Since taking office, Trump has been the most pro-crypto president to date. Upon taking office, he appointed the tech investor David Sacks as his “crypto czar,” and last week, the White House hosted a crypto summit, at which Trump announced the creation of an official Bitcoin strategic reserve and cryptocurrency stockpile.
“Using crypto to prop up the dollar and the national debt is a risky endeavor.”
It is easy to dismiss Trump’s reversal as a reflection of the preferences of donors like Sacks. That is no doubt part of the story. Yet a statement from Treasury Secretary Scott Bessent at last week’s summit was the latest indication that there is a deeper strategy: maintaining dollar hegemony in an increasingly multipolar world.
Bessent declared: “We are going to keep the US [dollar] the dominant reserve currency in the world, and we will use stablecoins to do that.” Stablecoins are cryptocurrencies that maintain a one-to-one peg with a fiat currency based on a stablecoin provider, usually a centralized private firm, maintaining real reserves of the currency. They provide the non-volatile value of a fiat currency, but with the regulatory flexibility of cryptocurrencies.