The New Link Between Stablecoins and US Treasuries

Stablecoins are seen as disruptors for cross-border micro-payments, with accelerated adoption by banks and businesses driving demand for short-term US Treasury allocations.

Bank of America estimates that stablecoins could generate an incremental demand for US Treasuries of approximately $25 to $75 billion in the coming year; the US Treasury Secretary is also actively connecting with issuers, hoping they will become key buyers of US Treasuries.

This not only improves the marginal demand for US Treasuries but also embeds cryptocurrency more deeply into the financial core, with policies and markets forming new positive and negative feedback loops.