Earlier this year, former President Donald Trump unveiled an ambitious promise: a “21st Century” overhaul of the United States’ payments infrastructure by 2028. This vision hinges on leveraging state-of-the-art crypto technology, specifically stablecoins, through the existing GENIUS Act. Crucially, this modernization is designed to enhance the financial system without introducing a central bank digital currency (CBDC), a concept Trump has consistently opposed.
Trump’s recent public support for the crypto industry marks a notable shift. In July, he lauded its rapid ascent, stating,
“You have certainly as an industry gone up more than anybody. Nobody’s gained the respect in such a short period of time.”
He then articulated his plan for the nation's financial backbone, which he described as “decades out of date,” causing costly and slow money transfers. His proposed upgrade, using crypto, aims to boost demand for US Treasuries, lower interest rates, and secure the dollar’s status as the world’s reserve currency.
Trump firmly believes that stablecoins help protect the dollar, asserting his commitment to its stability. His comments came as the dollar experienced fluctuations, including a 12% drop since he took office. Interestingly, this period saw Bitcoin soar, while the dollar’s subsequent recovery coincided with Bitcoin’s decline, illustrating a complex interplay.
The GENIUS Act and Evolving Regulatory Stance
The GENIUS Act is the core legislative tool for this transformation. On September 18, the Treasury Department began the formal process with an advance notice of proposed rulemaking (ANPRM). This seeks input on licensing stablecoin issuers, establishing capital and liquidity requirements, and defining permissible banking activities. This consultation is a critical precursor to binding standards for federally overseen dollar stablecoins.
A key policy is Trump’s executive action banning CBDCs. While bills to codify this ban have passed the House, the clear policy favors private crypto innovation over government-issued digital currency.
Federal banking regulators, including the OCC, Federal Reserve, and FDIC, have also softened their stance. This spring, they withdrew earlier restrictive guidelines, reopening pathways for banks to engage in digital asset custody, stablecoin activities, and distributed ledger technology (DLT) for payments. The OCC has further clarified permissible bank activities, aiming to reduce friction once Treasury finalizes the GENIUS standards.
Stablecoins: Powering Backend Settlement
While public stablecoin rails already see substantial transaction volumes, industry research from McKinsey suggests their immediate impact is more about serving as tokenized cash for backend settlement and treasury functions, rather than direct consumer spending. Real-economy impact, McKinsey argues, will grow as distribution and integration improve, especially once backing standards are unified under GENIUS rules. This standardization will shift competition towards control over distribution channels.
Legacy Systems Keep Pace with Crypto Advances
Traditional instant payment rails are also advancing rapidly. The Federal Reserve’s FedNow service settled $307 billion in Q3, and the private Real-Time Payments (RTP) network processed $481 billion in Q2. Swift’s Global Payments Innovation (GPI) now sees 90% of cross-border payments reach their destination within an hour. These developments have narrowed the speed gap once enjoyed by public blockchain networks.
However, crypto rails still offer distinct competitive advantages: 24/7 uptime, seamless weekend and cross-border settlement, programmability, and improved capital efficiency at the treasury layer. Major card networks are actively integrating these benefits. Visa has expanded stablecoin settlement support, and Mastercard has unveiled end-to-end capabilities, piloting regional rollouts for USDC and EURC. These integrations allow stablecoins to facilitate backend settlement without altering the consumer’s checkout experience.
Measuring Progress and the Dollar Strategy
The administrative process for the GENIUS Act involves an ANPRM, followed by an NPRM, and then a final rule. Treasury anticipates final GENIUS rules by 2026. Simultaneously, banking agencies must establish capital, liquidity, and supervision standards for Payment Stablecoin Service Intermediaries (PPSIs) and banks involved in stablecoin settlement.
Forward adoption hinges on card networks and acquirers embracing stablecoins for settlement, driven by potential cost reductions or faster times. The near-term path points to backend settlement replacement, where PSPs and acquirers can use stablecoins for merchant receivables, rather than a direct consumer-facing change. This multi-rail approach is already a program goal for companies like Mastercard.
The dollar strategy embedded in GENIUS relies on fully backed stablecoin reserves held in Treasury bills and cash. As federally licensed stablecoins expand, this creates recurring demand for short-dated U.S. government debt, reinforcing the dollar’s global distribution. While some forecasts are conservative, the focus remains on robust convertibility, audits, and safeguards to address supervisory concerns. An alternative exists where bank-led tokenized deposits could take the lead, as envisioned by the Bank for International Settlements.
Is Trump’s Vision on Track?
While significant motion is undeniable, the system is far from complete. Rules are in consultation, bank regulators are more amenable, and card networks are deploying. However, final GENIUS regulations, coordinated bank capital and liquidity treatments, and widespread acquirer adoption are still pending. Meanwhile, instant rails like FedNow and RTP continue to expand, closing the domestic speed gap crypto once exploited.
To truly gauge the "replacement," observers should watch metrics that test the settlement thesis, such as Treasury’s NPRM and final rule milestones, specific capital and liquidity guidelines, and acquirer dashboards showing stablecoin settlement share. Tracking banks holding stablecoin reserves and comparing stablecoin weekend/FX costs against Swift GPI routes will provide tangible evidence.
In summary, Trump has set a clear policy direction towards crypto-based settlement rails. The CBDC ban, the GENIUS framework, and a friendlier regulatory stance represent real progress towards a crypto-native settlement layer. However, a full "replacement" of legacy rails is not imminent, nor was it entirely promised. FedNow, RTP, and Swift GPI are scaling in parallel. The most realistic outcome is a multi-rail stack where stablecoins and tokenized deposits handle efficient backend settlement, while traditional cards and instant bank transfers remain primary consumer touch points. Realization of the full vision is likely to extend beyond an aggressive 2026 timeline and potentially beyond a second term.
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