The chart from the US Treasury (updated 04/17/2025) analyzes the impact of stablecoin growth on the US Treasury bond market (T-Bills)
- Over $120 billion in T-Bills are held by stablecoin issuers.
- USDT (Tether): holds $94.5B (65.7%) → accounts for the majority of reserves in T-Bills. (According to this report, this amount is quite high compared to what I knew before, I was also surprised)
- USDC (Circle) and PYUSD (PayPal) have a smaller proportion but still rely heavily on MMFs (I checked Circle's treasury reserve report in April and they hold $31 billion in treasury bonds, accounting for over 50% of reserves)
- Stablecoins could explosively grow to $2 trillion by 2028, an increase of 8.3 times compared to now
*Factors driving growth:
- Financial organizations: CME, spot BTC/ETH ETF, options…
- Tokenization of wholesale transactions: Estimated to reach $6.4 trillion by 2033.
- Payments using stablecoins: Merchant/PayPal are increasingly supportive.
- Interest-Bearing Stablecoins: More attractive, competing with traditional deposits.
- Recognized in bank liquidity strategies
- Banks are allowed to hold/interact with public blockchain
- Another driving factor is that the 4 main regions: the US, Singapore, the EU, and Hong Kong are coming closer together on core principles regarding stablecoins
- Notably in the US: Digital assets used as a means of payment, maintaining a fixed exchange rate (GENIUS Act)
- Interestingly, the GENIUS Act in the US allows Reserves to be US Government bonds
=> Here we can see if this law is passed, stablecoin issuers could more easily buy government bonds and issue stablecoins
- According to Citigroup, the amount of US Treasury Bonds held within stablecoin protocols has surpassed South Korea and is in the top 20, and in the future could surpass other countries and hold the largest amount by 2030
=> At that time, there is no need for countries to hold many US Treasury Bills, stablecoin organizations will hold them and issue $USD stablecoins globally
=> This could be a step for the "cryptodollar" to prove the market's potential for growth in the long term
#steven_research