New State Department Office Created to 'Actively Combat' Dollar Rivals and Foreign Digital Currencies

The newly proposed Dollar Dominance Act of 2025 is all about protecting the U.S. dollar’s king-of-the-hill status in global finance. It does this by creating a brand-new office inside the State Department called the Office of Strategic Currency Diplomacy (SEC. 2). Think of it as the dollar’s dedicated defense team, tasked with making sure the greenback stays the world’s favorite currency for everything from oil deals to central bank savings.

The Dollar’s New Defense Team

This new office reports directly to the Assistant Secretary for Commercial Diplomacy and has a clear mission: keeping the U.S. dollar dominant. Its core job is to "actively combat any attempts by rival countries to weaken the U.S. dollar’s role as the world’s main reserve currency" (SEC. 2). What does “actively combat” mean in practice? The bill doesn't spell out the tactics, but it gives the State Department broad authority to coordinate federal efforts—including those of the Treasury, Commerce, and intelligence agencies—to push back against nations trying to move away from the dollar in global trade.

For most people, the dollar’s status feels abstract, but it’s what keeps imported goods cheaper and makes U.S. financial markets the global safe haven. If the dollar’s status slips, it could eventually mean higher interest rates and more expensive imports for consumers and businesses alike. The office is specifically mandated to find ways to increase two things: the amount of U.S. dollars held by foreign central banks, and the number of international deals settled using U.S. dollars. This means we should expect more diplomatic pressure on trading partners to keep their commerce firmly in dollars.

The Crypto and CBDC Front

The bill shows that the State Department is paying close attention to the digital currency space. The new office will analyze how virtual assets like cryptocurrencies affect U.S. foreign policy and national security. More significantly, it has a mandate to "develop strategies to counter other countries rolling out their own Central Bank Digital Currencies" (CBDCs) (SEC. 2). This is a big deal because many countries are exploring CBDCs as a way to bypass the U.S.-dominated financial system.

If you’re a developer working in the crypto space or a business that deals in international digital payments, this office will be watching. Its job is to ensure that the global expansion of virtual assets doesn't undermine the dollar. The office will represent the U.S. in international discussions regarding these assets, essentially acting as the official gatekeeper for how digital finance interacts with U.S. economic security.

Who’s Coordinating the Policy Chaos?

One practical change this bill introduces is forcing federal agencies to play nice. The Office of Strategic Currency Diplomacy is tasked with "Leading Federal Coordination" when other agencies run programs overseas related to currency issues (SEC. 2). Right now, policy around sanctions, trade, and finance is often spread across Treasury, Commerce, and State, leading to overlapping or conflicting efforts. This new office aims to centralize the strategic direction, making sure everyone is rowing in the same direction to protect the dollar. While centralization sounds efficient, it also means the State Department gains significant new coordination power over the economic policies typically run by the Treasury Department—a potential source of turf wars down the line.