State Street Global: Stablecoins will bring significant incremental demand for U.S. Treasuries

ChainCatcher news, according to foreign media reports, at a money market fund conference held in Boston this week, stablecoins may drive a surge in demand for short-term U.S. Treasury bonds, becoming a hot topic.

Investors at the conference expect that stablecoins will absorb a significant amount of Treasury supply later this year. Stablecoins are typically pegged to high-liquidity assets like the U.S. dollar, and to maintain a 1:1 value peg, their issuers need to hold a large amount of highly liquid safe reserves, which often means purchasing U.S. Treasury bonds.

Yie-Hsin Hung, CEO of State Street Global Advisors, stated that stablecoins are attracting significant demand for the Treasury market. Currently, about 80% of the stablecoin market is invested in U.S. Treasury bills or repurchase agreements, amounting to approximately $200 billion. Although this accounts for less than 2% of the entire Treasury market, the growth rate of stablecoins is rapid and is likely to exceed the growth of Treasury supply.