Stablecoins could become a key funding source for the U.S. government
AI Overview
According to Odaily, the GENIUS Act was passed by the U.S. Senate this week, potentially positioning stablecoins as a significant source of funding for the U.S. government. U.S. Treasury Secretary Besant praised the GENIUS Act, suggesting that a regulated and evolving stablecoin market could create new buyers for U.S. government debt, thereby increasing private sector demand for U.S. Treasury securities. Besant previously informed the U.S. House Financial Committee in May that there are speculations that the stablecoin market could require up to $2 trillion in government securities in the coming years.
However, analysts warn that the stablecoin industry is unlikely to fully address the U.S. government's debt financing issues and may lead to additional risks. Increased demand for stablecoins will take time to develop, while the U.S. Treasury needs to issue a significant amount of debt securities over the year. If problems arise that prevent the Federal Reserve from lowering interest rates, the U.S. deficit could spiral out of control.$USDC
