The U.S. government is considering how to support dollar-denominated stablecoin projects overseas as officials explore another potential source of demand for U.S. government debt.
Bloomberg reported on September 23 that the Treasury Department, State Department and U.S. International Development Finance Corporation are in talks to form public-private partnerships, but did not announce any country, partners, funding commitments or timelines.
The talks build on Washington’s argument that regulated stablecoins can help expand dollar use worldwide and funnel reserves into short-term government securities.
On Sept. 22, Deputy Treasury Secretary Francis Brooke said stablecoin issuers already own nearly $200 billion in Treasury bills and other short-term securities, and that they may hold more as the rules implementing the GENIUS Act are finalized.
Treasury officials have said that the holdings observed are representative of the entire stablecoin market, and no U.S. government-backed US stablecoin project has been announced in relation to the foreign effort.
The GENIUS Act provides the regulatory framework behind that mechanism, requiring payment stablecoin issuers to hold reserves equal to the dollar value of all outstanding tokens.
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Qualifying assets include cash, qualifying deposits, short-term Treasuries, some repurchase agreements, and money market funds that invest in qualifying reserve assets. It would also permit foreign issuers using regimes Treasury deems comparable to that of the United States.
This pathway is distinct from the potential overseas effort reportedly being discussed, as this law governs U.S. access for qualified foreign stablecoins, not how the technology might be adopted overseas.
Major issuers represent an important exposure to the Treasury market. By the end of March 2026, Tether has roughly $141 billion in direct and indirect U.S. Treasury exposure.
As of June 30, according to a Circle filing with the SEC that firms must make quarterly, Circle held about 84% of USDC’s reserves in the Circle Reserve Fund, which invests that money in short-term US government securities.
The DFC could be one way to structure any future public-private investment. In December 2025, Congress increased the DFC’s authority to $205 billion. On Sept. 16, the DFC approved more than $8 billion of projects, none involving stablecoins.
The Treasury effect of foreign adoption depends on the token’s adoption metrics and the issuer’s reserve structure. Increased adoption does not translate to an equal increase in Treasury purchases, depending on whether the reserves are held as cash, deposits, repos, and money market funds.
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For users with dollar-denominated assets, adoption involves less marginal dollar demand compared to users who are moving from other currencies.
For now, the overseas stablecoin effort is only a rumored proposal, while Treasury is implementing the GENIUS Act, monitoring stablecoin companies, and keeping an eye out for other structural sources of demand for U.S. debt.
