Stablecoin Growth Increases Demand for U.S. Treasuries, Citi Reports
Stablecoins are increasingly vital in crypto markets and traditional finance, according to a report by Citigroup.
- Growing usage leads to higher demand for short-term U.S. Treasuries.
- Substitution from money market funds may limit the net effect of this demand.
- Proposed legislation could mandate reserves in short-dated government debt.
- The U.S. dollar’s dominance in stablecoin issuance reflects its status as a global reserve currency.
- Dollar-backed stablecoins like USDT remain prevalent due to their role in crypto trading and payments.
- New entrants such as PayPal and Visa are exploring stablecoin applications.
- The potential market could reach $1.6–$3.7 trillion by 2030, though regulatory constraints may limit growth.
- Issuance trends may reflect changes in the global monetary landscape.