State Street Global Advisors: Stablecoins will bring huge incremental demand for U.S. Treasuries, which may exceed the growth of U.S. Treasury supply

Odaily News According to foreign media reports, at a money market fund conference held in Boston this week, the possibility that stablecoins could drive a surge in demand for short-term U.S. Treasuries became a hot topic. Investors at the conference expect that stablecoins will absorb a large amount of U.S. Treasury supply later this year. Stablecoins are usually pegged to highly liquid assets such as the U.S. dollar. In order to maintain a 1:1 value peg, their issuers need to hold a large amount of liquid security reserves, which usually means buying U.S. Treasuries.
Yie-Hsin Hung, CEO of State Street Global Advisors, said that stablecoins are attracting a lot of demand for the U.S. bond market. Currently, about 80% of the stablecoin market is invested in U.S. Treasury bonds or repurchase agreements, with a scale of about $200 billion. Although it only accounts for less than 2% of the entire U.S. bond market, the growth rate of stablecoins is very fast and is likely to exceed the growth of U.S. bond supply. (Jinshi)