Trump's Push for the CLARITY Act — Using Stablecoins to Secure Treasury Demand
President Trump summoned crypto industry CEOs and urged them to speed passage of the CLARITY Act. The bill, which would establish a clear regulatory framework for crypto assets, has been under discussion since the start of the administration but has stalled for more than a year over disputes about which agency — the Financial Services Commission, the securities regulator, or others — would oversee issuers.
Analysts said the push to expedite the bill at this juncture reflects a strategy to secure Treasury demand. Stablecoins must always redeem one coin for one dollar deposited, requiring issuers to hold reserves in safe assets such as US Treasuries to maintain trust. In other words, as the stablecoin market grows, it automatically generates new buying demand for Treasuries.
Panelists interpreted this as the US government's attempt to solve the fundamental problem in the Treasury market — who will keep buying an ever-growing supply of debt. Following the Treasury's buybacks and pressure on financial institutions to hold Treasuries, this represents an attempt to cultivate a new class of buyers via stablecoins. They also noted that passage of the CLARITY Act would give momentum to follow-on legislation such as the GENIUS Act related to stablecoins.
In this process, some observed that governments and financial institutions in various countries, including Korea, could face pressure to buy US Treasuries. Korea's Treasury holdings are relatively low relative to the size of its economy, and given that the semiconductor sector alone paid more than 70 trillion won in corporate taxes in the first half, some suggested that investing a portion of that in US Treasuries could give Korea leverage in its relations with the US. However, others cautioned restraint, recalling Trump's past pressure to buy 'century bonds with no maturity,' and noting that the US, as shown by its past unilateral abandonment of the gold standard, is a counterpart that can change the rules at any time.