Impact of Stablecoins on U.S. Treasury Bonds

Treasury Secretary Scott Bessent stated that a thriving stablecoin ecosystem will increase demand for U.S. Treasury bonds, potentially lowering government borrowing costs and helping to reduce the national debt. This is because stablecoin issuers, like Tether and Circle, typically hold short-dated Treasuries as collateral to maintain the stablecoin’s peg to the dollar.