TechFlow, June 27 — According to Jinshi Data, at a money market fund conference held this week in Boston, the potential for stablecoins to drive a surge in demand for short-term U.S. Treasury securities became a hot topic. Attendee investors expect that later this year, stablecoins will absorb a significant portion of Treasury supply. Stablecoins, which are typically pegged to highly liquid assets like the U.S. dollar, require their issuers to hold large amounts of safe, liquid reserves—usually achieved by purchasing U.S. Treasuries—to maintain their 1:1 value peg.
Yie-Hsin Hung, CEO of State Street Global Advisors, said stablecoins are bringing substantial new demand into the Treasury market. Currently, about 80% of the stablecoin market is invested in U.S. Treasury bills or repurchase agreements, amounting to roughly $200 billion. While this represents less than 2% of the entire Treasury market, the rapid growth of stablecoins could soon outpace the growth of Treasury supply.
