The U.S. government's bold move to establish Bitcoin BTC/USD as an official reserve asset through President Donald Trump's strategic Bitcoin reserve (SBR) has thrust cryptocurrencies into the spotlight, yet stablecoins like PayPal's PYUSD and Ripple's RLUSD are faltering in their bid for market share against offshore giants like Tether's USDT.

What Happened: Signed into effect on March 6, the executive order designates Bitcoin as a sovereign-grade store of value, backed by roughly 100,000 BTC from forfeited Treasury holdings, while a favorable regulatory climate has failed to ignite adoption of U.S.-based stablecoins.

Analysts point to a paradox: despite unprecedented federal endorsement of digital assets, entrenched transnational players continue to overshadow domestic efforts in the stablecoin arena.

The SBR, detailed in H.C. Wainwright & Co. reports, marks a seismic shift for Bitcoin, which dropped more than 15% to below $80,000 amid investor frustration over vague acquisition plans beyond the initial reserve.

"The EO states that these coins ‘shall not be sold,'" notes the March 11 report, signaling a long-term U.S. commitment to holding its 198,000 BTC—net of 95,000 owed to Bitfinex—far surpassing Germany's recent 50,000 BTC sale.

Meanwhile, a separate U.S. Digital Asset Stockpile, including 61,000 ETH, points toward Bitcoin's elevated status, as the order prohibits proactive altcoin purchases.

Also Read: XRP’s RLUSD Stablecoin Has Only 0.7% Market Share: What Is Going On?

This federal backing, paired with Texas's SB-21 allowing state Bitcoin investments, has analysts predicting a global rush to secure Bitcoin, yet stablecoins tell a different story.

Stablecoins, pegged to the dollar and designed for stability, have enjoyed a Donald Trump administration tailwind, with a supportive Securities and Exchange Commission, a Tether-friendly Commerce Secretary, and relaxed banking rules from the Office of the Comptroller of the Currency.

Paypal’s PYUSD and Ripple’s RLUSD—launched in December as an "enterprise-ready" option on the XRP XRP/USD Ledger—have barely scratched the surface of their target markets.

RLUSD holds less than 0.7% of the stablecoin sector nearly three months post-launch, despite stabilizing at its $1 peg after early volatility.

PayPal's offering, integrated across its apps and third-party platforms, has similarly struggled, with market forces favoring established players like USDT, USDS and USDE.

"The explicit differentiation firmly elevates Bitcoin above other cryptocurrencies," the March 10 H.C. Wainwright report states, highlighting a policy focus that prioritizes Bitcoin's scarcity and value over stablecoins' transactional utility.

Tether's dominance persists, bolstered by its offshore roots and widespread use, while U.S.-based contenders grapple with adoption hurdles despite regulatory green lights.

PayPal has stated it remains committed to PYUSD, dismissing concerns tied to a Biden-era subpoena, and Ripple banks on RLUSD's enterprise appeal, but analysts see little dent in the offshore lead.

What’s Next: The contrast is stark: Bitcoin's reserve status tightens its supply and boosts institutional credibility, while stablecoins—touted as the future of payments—lag, revealing a market resistant to new entrants even under optimal conditions.

As the U.S. positions itself as a crypto leader, the stablecoin struggle point out to Tether's enduring grip.

Read Next:

• Bitcoin’s Heading To $73,000 Without A Fresh Narrative: 10x Research

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