Catenaa, Tuesday, August 12 2025- Stablecoin issuers such as Tether and Circle are emerging as major buyers of US Treasury bills, rivaling holdings of countries like South Korea and Saudi Arabia, a shift that could reshape the US financial landscape.
The move follows Congress’ July passage of the Genius Act, which legitimized stablecoins and expanded their use.
Tether now holds more than $100 billion in T-bills, placing it ahead of some major foreign holders.
A July Apollo report ranked the stablecoin sector as the 18th-largest external holder of Treasuries, with projections the industry could reach $2 trillion by 2028.
Proponents say the trend could reinforce dollar dominance, help enforce US sanctions abroad and provide a reliable buyer for government debt at a time when China and Japan are signaling a pullback from Treasuries.
David Sacks, the White House’s AI and crypto adviser, argued the new demand could even lower long-term interest rates.
Critics, including bank lobbying groups, warn that stablecoins could drain deposits from banks, threatening liquidity for lending.
Others question whether the sector’s current size justifies the hype, noting it remains small compared to the $7 trillion US money market fund sector.
Still, stablecoin growth has been rapid. USDC, issued by Circle, has surged 90% in market cap over the past year to $65 billion. Circle went public in June, marking the largest two-day IPO jump in decades. Analysts say the long-term impact on financial stability remains uncertain.
