Former BitMEX CEO Arthur Hayes warns of potential limits in the US Treasury's reliance on debt markets and highlights stablecoins as a critical new liquidity channel.
Challenges in Selling Government Bonds
In a July 3 post, Hayes noted that the US Treasury needs new ways to sell trillions of dollars in bonds without causing interest rates to spike. In his view, Treasury Secretary Scott Bessent faces the difficult task of finding buyers for US debt while maintaining market calm.
The Significance of Stablecoins and Deposit Tokenization
Hayes believes the solution lies in turning bank deposits into stablecoins. He points to JPMorgan's JPMD token, which will operate on Coinbase's Base network, as a key milestone. Hayes argues that once banks shift customer deposits into tokenized dollars, they can reduce costs and reinvest those deposits into Treasury bills.
The Future of Liquidity and Macro Strategy
According to Hayes, current developments could be seen as a form of stealth quantitative easing. Instead of the Federal Reserve printing money, liquidity will come from the private banking sector issuing stablecoins and purchasing T-bills. This will support risk assets like Bitcoin, which tend to thrive in rising liquidity conditions.
Arthur Hayes emphasizes that stablecoins are not merely payment tools but part of a broader macro strategy that links banking, debt markets, and digital assets.
