TechFlow news, October 31 — According to Decrypt, the U.S. Department of the Treasury released its quarterly financial report expressing concerns over the rapid growth of the stablecoin market. The report revealed that stablecoin issuers currently hold approximately $120 billion in U.S. Treasury securities, with Tether holding nearly $81 billion. The Treasury Department warned this could pose systemic risks.
The report noted that stablecoins account for over 80% of cryptocurrency trading volume, with USDT recording a 24-hour trading volume of $53 billion. The Treasury expressed concern that a run on a major stablecoin could trigger a sell-off in the Treasury market. It therefore recommended emulating the late 19th-century shift from privately issued money to government-backed central currency by ultimately replacing private stablecoins with a central bank digital currency (CBDC).
Notably, CBDCs remain controversial in U.S. politics. Several Republican lawmakers oppose their development, and Donald Trump has pledged to block CBDC implementation if re-elected. However, reportedly, World Liberty Financial—a crypto project backed by Trump—is planning to launch its own stablecoin, creating a stark contrast with the Treasury’s recommendation.
