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    Stablecoins boosting demand for US T-bills: Treasury Dept

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    HI The United States turns its attention to stablecoin regulation, USA, US, Uncle Sam, Government, cryptocurrency industry, adoption, regulation

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    The US Treasury’s Borrowing Advisory Committee has discussed the potential benefits of stablecoin usage and the possibility of tokenizing Treasury bills (T-bills), with suggestions including creating a dedicated blockchain for T-bills. The rise of stablecoins, which use T-bills or Treasury-backed transactions as collateral, is increasing demand for short-term Treasury securities. Furthermore, tokenizing assets such as T-bills could potentially open up a $30-trillion global market. Large entities like BlackRock USD Institutional Digital Liquidity Fund and Franklin OnChain US Government Money Fund, with assets under management of around $530 million and $410 million respectively, are also key players in this space.

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    Looks like stablecoins are making a splash in the demand for short-term US government bonds, also known as Treasury bills. This info was revealed in a recent meeting with the US Treasury’s Borrowing Advisory Committee.

    In that discussion, they debated the perks of stablecoin usage and the possibility of tokenizing Treasury bills. One person even proposed creating a specific blockchain for T-bills. These remarks hint at the government’s growing interest in incorporating blockchain technologies into the US financial landscape.

    Mainly because stablecoins use either T-bills or Treasury-backed repurchase agreement transactions as collateral, their growth seems to be spurring demand for short-term Treasury securities. This was pointed out by a Committee member.

    Tokenizing T-bills could bring forth changes in operations and kickstart innovation in the Treasury market. But it might also cause some financial shake-ups. One person thought tokenization would mean the creation of a privately controlled blockchain overseen by a trusted government authority.

    Stablecoins – which are tokens connected to the US dollar – are becoming the foundation of trading and payment operations. The total market capitalization of stablecoins reached never-before-seen highs in 2024 and is now nearing $180 million.

    Tether tops the list in the realm of stablecoins with a market cap of $120 billion. Circle’s USD Coin trails behind, with a market cap around $35 billion.

    On another note, tokenizing real-world assets (everything from Treasury securities to artworks) could offer a global market opportunity worth $30-trillion. Demand is on the rise for tokenizing T-bills and other easily convertible yield-bearing assets.

    The largest of these in terms of assets under management are BlackRock USD Institutional Digital Liquidity Fund and Franklin OnChain US Government Money Fund. They have assets under management approximately $530 million and $410 million, respectively.

    Source: Cointelegraph

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