As the U.S. dollar suffers its worst H1 since 1973, Washington views dollar-backed stablecoins as a tool to counter de-dollarization.
A recent report by crypto bank Sygnum suggests that the U.S. is increasingly relying on dollar-backed stablecoins to help defend the dollar’s global dominance.
Syngum’s analysis highlights that while the dollar remains integral to global markets, its long-term position is under growing pressure. The U.S. dollar has already fallen 10.7% against major currencies through June 2025, marking its worst first-half (H1) performance since 1973, according to CNBC.
This slide comes amid growing concerns over monetary policy, rising debt, and new tariff announcements from the Trump administration. As such, investors are increasingly turning to alternative safe havens, including gold, which had its strongest H1 run since 1979, and in some cases, cryptocurrencies.
This trend of “de-dollarization” has been building for years, Syngum’s report notes, as more countries execute trades in local currencies or digital assets like Bitcoin (BTC), which currently boasts a market capitalization of $2.3 trillion.
“The dollar’s share in global reserves has been on a steady decline, dropping from 70-75% in the early 2000s to around 55% now,” the report notes. “The dollar’s decline has not been offset by significant increases in the Euro, Yen, or Pound, but rather there has been a rise in non-traditional reserve currencies, such as the Yuan, Australian dollar, Canadian dollar, Korean won, and Singapore dollar.”
In response, the U.S. has been turning to digital tools, particularly stablecoins, as a way to curb the trend away from the dollar and further its reach into emerging markets. Stablecoins refer to digital currencies that are often pegged 1:1 to the U.S. dollar.
The stablecoin market has been growing for nearly two years straight, and now accounts for nearly one-third of decentralized finance (DeFi) revenue, as growing adoption drives the sector’s market capitalization above $258 billion. Tether’s USDT remains dominant with a $160 billion market cap, accounting for 62% of the sector, per DeFiLlama.
“The US administration believes that dollar-denominated stablecoins can serve this demand and reverse the dollar’s eroding reserve currency status, and is actively promoting the expansion of the dollar-denominated stablecoin market and encouraging the speedy passage of stablecoin legislation,” the report reads.
Recently, U.S. lawmakers moved forward with new rules for digital assets: The GENIUS Act, which focuses on establishing a regulatory framework for stablecoins and their issuers, and the CLARITY Act, which sets clearer rules for the broader crypto ecosystem.
