Original text: cryptoslate
Compiled by: Blockchain Knight
U.S. Treasury Secretary Scott Bessent stated that the demand for U.S. government bonds in the digital asset space could surge in the coming years, with a potential scale reaching $2 trillion.
Bessent made the above remarks during a hearing held by the House Financial Services Committee on the global financial system, emphasizing the increasing financial importance of digital assets to the broader economy.
Bessent stated that the U.S. must play a leading role in establishing global standards for the crypto asset market, noting that the U.S. has the opportunity to benefit while guiding innovation.
He pointed out that the integration of stablecoins and other blockchain-based financial products with the dollar and the U.S. Treasury bond market is deepening, indicating that digital assets can support U.S. national financial interests.
The growth of stablecoins drives the demand for Treasury bonds.
Most of the expected demand comes from stablecoins. Currently, stablecoins heavily rely on U.S. short-term Treasury bonds to maintain their reserves.
As of the end of March, the largest stablecoin issuer, Tether, held nearly $120 billion worth of short-term U.S. Treasury bonds as reserves for USDT. Meanwhile, as of February 2025, Circle, the issuer of USDC, reported holding over $22 billion in U.S. Treasury bonds.
As the circulation of stablecoins increases and global demand rises, the demand for low-risk assets such as Treasury bonds as corresponding collateral also grows.
The connection between digital assets and the U.S. debt market is becoming increasingly tight, as private stablecoin issuers are increasingly becoming stable institutional buyers of U.S. Treasury bonds.
This emerging source of demand may add new resilience and liquidity to the U.S. Treasury bond market, especially amid widespread concerns about overseas investors' willingness to purchase U.S. Treasury bonds.
U.S. Congress weighs new legislation
Proposed legislation aimed at clarifying the role of stablecoin issuers in the U.S. Treasury bond market ecosystem further reinforces expectations of potential demand growth.
Currently under consideration in Congress are the 2025 Stablecoin Trust and Bank Licensing Enforcement Act (STABLE Act of 2025) and the 2025 Government Digital Currency Innovation and User Safety Act (GENIUS Act of 2025), both of which require stablecoin issuers to fully collateralize their issued stablecoins with high-quality liquid assets, including short-term Treasury bonds.
However, due to political differences between Democrats and Republicans, these bills may face delays. Recently, nine lawmakers withdrew their support for the bill, citing a lack of sufficient rules to protect investors.
If these bills are passed, they will effectively require the entire stablecoin industry to invest in Treasury bonds, thereby integrating digital dollars more deeply into U.S. financial infrastructure.
Supporters of these bills believe that such regulations will enhance trust in stablecoins while consolidating the dollar's dominance in the digital market.
