KEYTAKEAWAYS
- Trump framed U.S. stablecoin legislation as a strategic move to prevent China from leading global crypto markets.
- The Genius Act has passed, but regulatory rulemaking creates a near-term implementation gap.
- Progress on China’s digital yuan and delays around the Clarity Act heighten geopolitical stakes in digital finance.
CONTENT
At the World Economic Forum, Donald Trump said U.S. stablecoin policy aims to block China’s dominance, spotlighting rising U.S.–China rivalry in crypto regulation.
On January 21, Donald Trump addressed his administration’s crypto policy stance during the annual meeting of the World Economic Forum in Davos, Switzerland.
Trump stated that his support for recently passed U.S. stablecoin-related legislation was driven not only by political considerations, but more importantly by strategic concerns over global competition. He emphasized that the United States must prevent China from gaining a dominant position in the crypto and digital currency markets.
His remarks once again placed U.S.–China rivalry in the digital finance sector under the spotlight, highlighting crypto regulation as an increasingly important geopolitical issue.
TRUMP NAMES CHINA AS A KEY RIVAL IN CRYPTO MARKET LEADERSHIP
Donald Trump explicitly pointed to China as a strategic competitor, stressing that the United States must not allow China to dominate the global crypto market.
Trump said that when he signed the payment-focused stablecoin legislation, the Genius Act, in July last year, part of the motivation was that the bill was “politically popular.”
However, he emphasized that the more critical reason was geopolitical competition.
“It is politically popular, yes—but more importantly, we have to make sure China doesn’t take this market. Once they control it, it’s very hard to take it back,” Trump said.
GENIUS ACT HAS PASSED, BUT IMPLEMENTATION WILL TAKE TIME
Although Trump signed the Genius Act in July and the bill has formally cleared the legislative process, its real-world implementation is not immediate.
Under the law, U.S. regulators must first draft and approve the accompanying regulatory framework. The rules are required to be implemented within 120 days after approval, or no later than 18 months after the law officially takes effect.
This creates a temporary policy gap before the legislation can be fully enforced.
DIGITAL YUAN PROGRESS SEEN AS A POTENTIAL CHALLENGE TO DOLLAR STABLECOINS
Some experts warn that if the Clarity Act fails to clearly address “yield mechanisms,” U.S. dollar-pegged stablecoins could face a competitive disadvantage relative to China’s digital currency strategy.
In January, the People’s Bank of China approved interest payments on digital yuan deposits held at Chinese commercial banks. By contrast, U.S. banking groups continue lobbying Congress to explicitly prohibit any form of yield or interest—whether from third-party platforms or stablecoin issuers—under the Clarity Act.
>>> More to read: Why the “Clarity Act” Turned From a Bullish Catalyst Into a Risk
SENATE TIMELINE REMAINS UNCLEAR, RAISING RISK OF FURTHER DELAYS
As of now, the U.S. Senate Banking Committee has not scheduled the next review of the Clarity Act. Lawmakers and industry sources suggest the bill may not return to the agenda for several more weeks.
Against the backdrop of intensifying U.S.–China competition in digital currencies and crypto policy, Trump’s remarks in Davos have once again brought the struggle over stablecoins, the digital yuan, and global financial leadership into sharp focus.
