BIS quantifies stablecoin impact on Treasury rates as market influence . . . Stablecoin impact on Treasury rates Regarding the impact on Treasury rates, the BIS study notes that a naive analysis of a $3 5 billion change in stablecoin holdings of Treasury bills implies a 25 basis point (0 25%) change in short term Treasury yields However, it says this significantly overstates the impact, because many factors will
Stablecoins and safe asset prices - Bank for International Settlements This paper examines the impact of dollar-backed stablecoin flows on short-term US Treasury yields using daily data from 2021 to 2025 Estimates from instrumented local projection regressions suggest that a 2-standard deviation inflow into stablecoins lowers 3-month Treasury yields by 2-2 5 basis points within 10 days, with limited to no spillover effects on longer tenors
[Mi-seon Lees Crypto ON]Impact of US Stablecoin Bill on Treasury . . . As a result, increased issuance of dollar stablecoins will drive demand for US short-term Treasuries BIS analysis suggests that an inflow of $3 5 billion into the stablecoin market, requiring issuers to purchase an equivalent amount of US short-term Treasuries, would lower short-term US interest rates by approximately 3 basis points
Stablecoins’ Impact on US Treasury Stability - hgbr. org Indeed, the figures speak for themselves: two of the largest stablecoin issuers, Tether and Circle, collectively hold a staggering $166 billion in U S Treasuries This makes them significant, if relatively new, players in the Treasury market, effectively channeling global digital capital into U S government debt
Tether Issuance Moves Treasury Markets: How Stablecoin Growth Is . . . Specifically, prices of the BIL ETF —a real-time proxy for Treasury demand—rise by approximately 1 5 basis points within the hour after significant Tether minting events Although small, this impact is consistent and shows no pre-event trends, supporting the view that exogenous demand shocks from stablecoin issuers drive these movements
The Rise of Stablecoins and Their Influence on U. S. Treasury Demand: An . . . Main Points: Stablecoin Surge and Treasury Demand: U S Treasury highlights how stablecoin usage is pushing demand for short-term government securities Stablecoin Reserves and Treasury Securities: Major stablecoins like Tether (USDT) invest heavily in U S Treasuries and repurchase agreements, creating a substantial link to the traditional finance sector Hedging Needs with Treasuries: The
The Stablecoin Discount: Evidence of Tethers U. S. Treasury Bill Market . . . Stablecoins represent a critical bridge between cryptocurrency and traditional finance, with Tether (USDT) dominating the sector as the largest stablecoin by market capitalization By Q1 2025, Tether directly held approximately $98 5 billion in U S Treasury bills, representing 1 6% of all outstanding Treasury bills, making it one of the largest non-sovereign buyers in this crucial asset class
Digital Money - U. S. Department of the Treasury to increase interest rates to maintain funding or find alternative funding sources (i e , expand their wholesale funding activity) What are the Potential Impacts on Bank Deposits? Two main potential impacts of deposits moving to stablecoins: 1 An overall increase in the demand for Treasuries —Reserve requirements outlined in proposed stablecoin
Stablecoins and the US Treasury Market - SSRN That, at least, is the theory This Article looks under-the-hood to examine the emerging interdependence between the Treasury market and the US dollar stablecoin ecosystem It outlines the benefits Importantly, it explores the risks building within both the stablecoin and the Treasury markets from relying heavily on one another for growth
BIS Working Papers - Bank for International Settlements deviation inflow into stablecoins lowers 3-month Treasury yields by 2-2 5 basis points within 10 days, with limited to no spillover effects on longer tenors We also find evidence of asymmetric effects: stablecoin outflows raise yields by two to three times as much as inflows lower them De-composing the yield impact by issuer shows that USDT