For all the debate about trade wars and flight away from the dollar in the aftermath of the April 2 “ liberation day ,” a more immediate challenge for many financial policymakers is actually a rush toward the dollar triggered by the global demand for dollar-backed stablecoins.

That’s why the world’s financial leaders are closely watching the debate playing out in Congress right now over the future of stablecoin legislation. Next week, the Senate will likely take up the GENIUS Act, which will define the responsibilities for US stablecoin issuers and clarify who is responsible for oversight.

Stablecoins are cryptocurrencies whose values are pegged to a specific underlying asset. This makes them “stable”—at least in theory.

Currently, 98 percent of stablecoins are pegged to the US dollar

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