Stablecoins Hold $120 Billion in US Treasuries
Date: 2024-10-31 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
In its Q4 2024 report, the US Treasury Department noted the active adoption of blockchain and growing interest in cryptocurrencies. Stablecoins such as Tether and USDC, which are pegged to fiat currencies, have become an important part of the digital economy.
According to the 17-page report, these “stable, cash-like” tokens provide less volatile instruments for crypto traders and investors. US Treasury experts estimate that cryptocurrency-stablecoin pairs account for 80% of all digital asset trades.
To date, stablecoin issuers prefer to place significant reserves in short-term Treasury bonds. About 63% of Tether’s $120 billion in assets are in Treasury bonds, and crypto companies have invested a total of $120 billion in these securities to back stablecoins.
As digital assets grow, the US Treasury Department expects interest in fiat-pegged cryptocurrencies to continue to increase. Unlike blockchain enthusiasts, the Treasury Department believes that the high volatility of cryptocurrencies creates “demand for quality assets,” which is reflected in the desire to buy Treasuries.
Investors store more than $176 billion in stablecoins across various platforms and blockchain networks. In countries such as the European Union, where the MiCA crypto asset market regulation is in effect, stablecoins have already received official recognition.
Bipartisan talks on stablecoin legislation are also ongoing in the US, with some analysts believing that lawmakers may allow banks to issue assets like USDT.
Growing interest in stablecoins is attracting new players. Blockchain giant Ripple recently launched RLUSD, and there have been rumors of a stablecoin being launched by Trump-linked World Liberty Finance.
