Stablecoins’ step towards mainstream could shake up parts of US Treasury market

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Since the Stabbuts take a step towards joining the mainstream, some sections of the US Treasury Market, especially the short -term maturity securities, may suffer from fluctuations because they are closer to the world of cryptocurrency.

The Congress is ready to legislate to establish a regulatory framework for Stable Queens, which is expected to help legalize dollar agricultural currencies, which is commonly used by Crypto traders to transfer funds among token.

Supporters of the bill say clear rules will promote more stable activity, and will support short -term US government loans, or the growing sector of buyers of T -Blas, which are commonly considered to be the equivalent of cash. But others fear that a large map for a relatively new and more volatile industry can lead to sharp fluctuations in the bills market.

“In the event of a sudden confidence, regulatory pressure, or market rumors, it can be stimulated, which can potentially mobilize the prices of treasury,” said Cristiano Ventrasley, vice president and senior analyst of digital assets.

He added, “A problem in the stubborn sector can spread to wider financial markets, which can affect the entities with similar assets or (who) rely on the Stable Quinn liquidity.”

If the law is signed, the token for the Stabon Bill will need to support liquid assets-such as the US dollar and the short-term Treasury Bills and monthly disclosures on the formation of their reserves. This means that if the Establishment is expected, the issuers will have to buy more TB bills to back their assets.

The bill can be approved by the Senate earlier next week, and eventually increases the amount of US treasury through teachers and Circle issues such as Stubbank issues, after which it was debated on NYSE on Thursday. According to a report on Ben & Company’s Financial Services Practice, the US treasury together has $ 666 billion.

According to the standard chartered estimate, if the legislature is approved, according to the Crypto data provider Congico, the Stable Quinn Market, which is currently about $ 247 billion, can increase to $ 2 trillion by 2028. US Treasury Secretary Scott Basant encouraged lawmakers to legislate to fix federal rules for Stabbuts, and argued that this could lead to an increase in demand for US government debt. Currently, the Treasury Securities residuals have about $ 29 trillion, of which $ 6 trillion bills.

Red flags

In a April research note, JP Morgan’s analysts estimates that in the coming years, Stabon issuing Treasury Bills could become the third largest buyer. It raises red flags for some people, fearing that the crypto will lead to close relations between the ecosystem and the traditional financial world.

A group of treasury lending advisory committee, banks and investors who advise the government about its financing, said in a research in April that the rise in the Stabon Market at the cost of bank reserves could reduce the demand for banks’ US treasury, as well as credit.

“If (Stubbocan issuers) have to transmit these treasures fast, or demand that the market, it can produce some credit cranks,” said Mark Hes, associate director of cryptocurrency and financial technology for financial reforms. Hez said that it is assumed that after the passage of the legislation, stabbicins are more widely used.

Money market funds, which invest in short -term loans, can affect. Money Funds are closely watching Establishment, but the market size will have to be significantly larger to raise financial stability concerns, said Pate Crane, the president of the crane data.

“Treasury bills are usually so small (in maturity) that people do not worry about the movement of prices, but of course, the price is going to decrease,” he said. Matters with Establishment have not grown enough to cause systemic problems, but if federal legislation is encouraged to adopt a widespread adoption, the calculation may change.

In 2022, a defect in the crypto markets sent a teacher’s stubborn under his dollar peg, which did not affect the Treasury market. At the time, the then US Treasury Secretary Janet Yelin, the then US Treasury, said that Stabonins, such as Teacher, did not make the financial system a systemic threat because they were very low on the scale. In 2023, the Circle’s USD coin also lost its dollar PEG when the company revealed that it had a part of its reserves failed in the Silicon Valley Bank. The constituency and the teacher refused to comment.

Possible growth in the market

Nevertheless, some people argue that government debt can benefit from the growing demand. “If we make the Stubbank Legislature, dollars will be exported around the world, which will increase the dollar as the world’s reserve currency,” said Matt Hogan, a Crypto Asset Manager, Chief Investment Officer of the Butt Vice Asset Administration, Matt Hogan.

Roger Halam, the global head of the Wangord, said that the demand for short -term public debt equipment could encourage the Treasury Department to increase the issuance of the T -Bill instead of a long history loan, to meet the need for financing its deficit. For a long time, US debt production has been increasing recently, partially due to concerns over the country’s financial health.

“You can choose to issue more bills to meet the demand, which are currently watching the market … on the scale of future problems and who is going to buy all these bonds,” said Halm.