.jpg)
- Stablecoins could be a major player in the US Treasury market.
- According to a Bitwise executive, stablecoin holdings of US Treasuries could grow to 15%.
US Treasuries have become the preferred reserve asset for most stablecoin issuers. Given their safe and liquid nature, issuers like Tether and Circle have become major players in the market to enable 1:1 backing for every stablecoin token issued.
According to Juan Leon, investment strategist at digital asset management firm Bitwise, US Treasury bonds held by stablecoins could Growing To 15% from the current 1%.
“Stablecoins hold about 1% of US Treasuries today, but that percentage could soon grow to 15%, putting them in the top 3 holders.”
Source:X
Stablecoins: Not “Little Whales”?
The above Bitwise predictions were in reaction to a recent Bloomberg report. a report Which has reduced the importance of stablecoins in the US Treasury market.
According to the report, stablecoins’ 1% market dominance means issuers were “small whales,” less influential than other players in the bond market.
However, Leon noted that the digital economy is growing at a 3X rate, and that a potential US stablecoin framework would accelerate the growth of this sector.
She added that the value of the stablecoin has risen from zero to $170 billion in a few years and could grow even faster to $1 trillion when the US passes the stablecoin bill by 2025.
“Stablecoin usage is growing at an exponential rate, meaning that the move from $170 billion to $1 trillion will happen faster than the move from $0 to $170 billion. At $1 trillion, stablecoin purchases of Treasuries would dwarf the top 10 money market funds, putting them in the top 3 holders (over $800 billion).”
Howard Lutnick, chairman of the giant American investment bank Cantor Fitzgerald, echo Lutnick praised Tether for helping pay down US debt by choosing US Treasuries as a backup.
“Tether has taken it to the next level by putting USDT, the digital dollar, into the hands of people in emerging markets around the world. Since USDT is backed by tens of billions of U.S. Treasuries, the 300 million USDT wallet holders around the world are helping to finance our debt.”
For his part, Quinn Thompson, founder of crypto hedging at Lekker Capital, pointed out that Lutnick’s public endorsement of Tether indicates “potential.”It changes.’
According to Quingeco DataAs of writing, the market cap of stablecoins stands at $169.5 billion, with Tether’s USDT leading at $117 billion, followed by Circle’s USDC at $34.8 billion.
Source: Quingeco
