Stablecoins like Tether and Circle have reached new heights, becoming major holders of US Treasury bonds, indicating significant changes in the financial landscape.
Overview of the Current Position of Stablecoins
Tether holds over $100 billion in Treasury securities, ranking as the 18th largest holder of US debt, while Circle maintains between $45 billion and $55 billion in T-bills. Together, these companies control more US debt than economies such as Germany, South Korea, and the UAE.
Growth Dynamics and Market Perception
Transaction volumes in stablecoins have already surpassed those of Visa, with a total market capitalization reaching $270 billion. Projections suggest this could grow to $2 trillion by 2028, creating unprecedented demand for Treasury bonds.
Impact of Traditional Bondholders and Future Prospects
The decreasing positions of traditional foreign holders like China and Japan create opportunities for stablecoins. Experts note that consistent presence from stablecoin issuers may bolster confidence in the US Treasury and enhance the dollar's global standing.
The emergence of Tether and Circle as significant players in the Treasury market highlights the influence of digital currencies on traditional financial instruments and their potential impact on international markets.
