Stablecoin issuers like Circle and Tether may threaten the credit system

According to reports, stablecoin issuers such as Circle and Tether are purchasing large amounts of U.S. Treasury bonds that exceed the holdings of most countries, a move that could reshape the U.S. economy. The latest data from Tether shows that it holds over $100 billion in U.S. Treasury securities, surpassing countries like the UAE and Germany. Although cryptocurrency advocates argue that stablecoins help reinforce the dollar's dominance globally, critics warn that even a small share of stablecoins in the overall market could still lead to financial instability in the banking sector. This is because stablecoins could siphon off funds from bank deposits, which are necessary for the liquidity required for loans, potentially threatening the stability of the credit system.