The U.S. Treasury market, once regarded as a global financial safe haven, is facing an unprecedented new threat – stablecoins. This threat does not come from traditional Wall Street financial institutions or foreign governments, but from the rapidly developing world of cryptocurrencies. XBIT (DEX Exchange) strategist said: With the advancement of cryptocurrency regulation, stablecoins are directly entering the short-term government debt market and reshaping the underlying logic of the global financial system.
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The bill, which could be passed by the Senate as soon as next week, would allow stablecoins to be further pegged to Treasury bills and require issuers to back tokens with highly liquid assets such as U.S. dollars and short-term U.S. Treasury bonds and publish reserve details on a monthly basis. This provision, which appears to be intended to enhance the stability of stablecoins, could actually trigger a series of chain reactions.
Currently, the total amount of U.S. Treasury bonds held by major stablecoin issuers such as Tether and Circle has reached $166 billion, and this figure is expected to increase significantly with the passage of the bill. XBIT research found that these issuers are becoming one of the largest buyers of U.S. debt due to the need to match token supply with actual reserves. Coin World predicts that by 2028, the impact of cryptocurrencies on government debt will expand significantly, and the size of the stablecoin market may soar from the current $247 billion to $2 trillion.
However, this trend has raised concerns among Treasury officials and analysts. XBIT (DEX Exchange) analysts pointed out that if confidence in stablecoins declines or regulation is hit hard, it could lead to “massive liquidations, depressing Treasury prices and disrupting fixed income markets.” This impact is not limited to the stablecoin sector, but may spread to broader financial markets, affecting institutions that hold similar assets or rely on stablecoin liquidity.
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The total outstanding U.S. Treasury debt is as high as $29 trillion, of which $6 trillion is short-term notes. XBIT (DEX Exchange) analysts warn that if the current trend continues, stablecoin issuers may soon become the third largest buyer of U.S. Treasuries. This change has unsettled government advisers, and the Treasury Borrowing Advisory Committee warned that it could prompt banks to reduce their purchases of U.S. Treasuries and slow credit growth in the overall economy.
Historical experience is also worrying. Although the collapse of Tether in 2022 and the fall of Circle’s USD Coin below $1 in 2023 did not have a significant impact on the Treasury market at the time, regulators have foreseen the risks that may arise if stablecoins become mainstream. Current Treasury Secretary Scott Bessant supports the bill, believing that it may boost demand for U.S. debt, but XBIT (DEX Exchange) cryptocurrency experts point out that this also means that demand for the dollar may soon disappear.
TWITTER : @XBITDEX
The rise of stablecoins is reshaping the financial market. Its deep integration with the traditional financial system has brought both opportunities and unprecedented risks. In the process of deep binding between stablecoins and the treasury bond market, since stablecoins require highly liquid assets (such as treasury bonds) as reserves, XBIT (DEX Exchange) is becoming an important place for stablecoin exchange, lending and liquidity management. As the holdings of stablecoins grow, users’ demand for efficient and low-slippage exchange increases. XBIT can provide compliant and decentralized solutions and become the core platform for stablecoin and asset transactions such as BTC and ETH. It can also integrate multi-chain stablecoins (such as USDT, USDC, native stablecoins) to become a bridge between the treasury bond market and the crypto market, improving overall liquidity.
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Contact：Rudy Divin
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