Scott Bessent pitched stablecoin issuers as trillion-dollar buyers of US government debt. Supply has been shrinking since May, the first sustained…
- The US Treasury's strategy to rely on stablecoins as major buyers of government debt is faltering as stablecoin supply shrinks due to new regulations (GENIUS Act) that prevent yield payments.
- This regulation incentivizes holders to move funds to tokenized Treasury products that offer yield, undermining the Treasury's goal of absorbing debt through stablecoin balances.
- Upcoming bank-issued stablecoins may either bring new on-chain balances or simply convert existing bank liabilities, with the latter scenario being more probable and not significantly aiding the Treasury's demand thesis.
Topics: Asset types, Public debt, Scalability, Financial instruments, Tokenized us treasuries, Growth metrics
Tags: #stablecoin #ustreasury #scottbessent #genuisact #tokenizedtreasuryfunds #institutionalcash #yield #bankofamerica #citi #goldmansachs
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