Opinion: Stablecoins Will Bring Huge Incremental Demand to US Treasuries, Growing Faster Than US Debt Supply

BlockBeats News, June 27th - This week, at a money market fund conference in Boston, the possibility of stablecoins driving a surge in short-term U.S. Treasury demand became a hot topic. Attendees expect that later this year stablecoins will absorb a significant amount of U.S. debt supply. Stablecoins are typically pegged to highly liquid assets such as the U.S. dollar, and to maintain a 1:1 value peg, their issuers need to hold a large amount of liquid and secure reserves, which often means buying U.S. Treasuries.

Yie-Hsin Hung, CEO of New York Life Investment Management, stated that stablecoins are attracting significant demand for the U.S. Treasury market. Currently, about 80% of the stablecoin market is invested in U.S. Treasury bills or repurchase agreements, with a total size of around $200 billion. Although this accounts for less than 2% of the entire U.S. debt market, the growth rate of stablecoins is rapid and is likely to outpace the growth of U.S. debt supply. (Jinse Finance)