[Bitcoin Now] Why the U.S. Is Serious About Stablecoins

Stablecoin Market Expected to Reach USD 2 Trillion
Rising U.S. Short-term Treasury Demand from Reserve Asset Growth
Partial Relief for Long-term Treasury Issuance Burden

There are forecasts that the U.S. dollar stablecoin could grow into a tool that drives global dollar demand and alleviates U.S. fiscal burdens. As the stablecoin market expands, demand for U.S. short-term Treasuries is expected to rise, allowing the U.S. to establish a new base of structural investors.

On September 2, iM Securities analyzed that attention should be paid to dollar stablecoins as the fiscal burden on the U.S. continues to grow. The Treasury Borrowing Advisory Committee (TBAC) under the U.S. Treasury Department has also recently reviewed external forecasts that the stablecoin market will reach around USD 2 trillion by 2028 and discussed the potential impact on Treasury demand.

Currently in the U.S., concerns about the value of the dollar are mounting as the Treasury expands its buyback (early redemption) program for long-term Treasuries. In response to the sharp rise in long-term interest rates, the Treasury doubled the size of its buyback operations for 10-30 year Treasuries to a minimum of USD 4 billion per round. The market has interpreted this move as policy intervention to curb rising long-term interest rates, leading to so-called "debasement trades," where funds shift from the dollar to real and alternative assets such as gold and Bitcoin amid a weakening dollar.