Key Takeaways
- Stablecoin issuers now collectively maintain $182.4 billion in US Treasuries, rating seventeenth globally.
- Tether and Circle account for almost all of those reserves, with Tether’s USDT alone surpassing $125 billion.
- New US and European laws will additional formalize restrictions on reserve asset composition for stablecoins.
Main US greenback stablecoin issuers, together with Tether, Circle, First Digital, and Paxos, now maintain a mixed $182.4 billion in US Treasury securities, in keeping with current Treasury Division knowledge.
This quantity surpasses the Treasury holdings of South Korea and the United Arab Emirates, inserting these issuers seventeenth globally—just under Norway’s $195.9 billion and forward of Saudi Arabia’s $133.8 billion.
Tether’s USDT leads with over $125 billion in Treasuries, as confirmed by CEO Paolo Ardoino.
Circle’s USDC is backed by $55.2 billion in T-bills and in a single day repos.
First Digital’s FDUSD reserves are additionally primarily held in Treasuries, totaling round $1.3 billion, whereas Paxos’ PYUSD makes use of in a single day reverse-repo agreements collateralized 97% by Treasuries, supporting roughly $880 million in authorities debt.
Treasury holdings drive liquidity
Treasury payments are favored by issuers for his or her day by day liquidity and yields above 5%.
Tether’s newest assurance reported that Treasuries, repos, and Treasury-heavy cash market funds represented greater than 80% of its collateral, contributing to $1 billion in first-quarter revenue.
Circle, in the meantime, depends on BlackRock’s Circle Reserve Fund for same-day liquidation to satisfy redemptions.
Paolo Ardoino commented that stablecoin issuance “creates incremental demand for US debt with out counting on the banking system,” emphasizing Tether’s rating above Germany, the UAE, and Spain.
Regulatory developments
Lawmakers within the US and Europe are transferring to limit stablecoin reserve belongings to money and short-term Treasury securities.
The lately accepted GENIUS Act within the US would formalize these limits, whereas Europe’s MiCA regime already bars commodities for euro-pegged cash. Stablecoin treasurers observe these guidelines match their present funding methods however warn that overconcentration ties stablecoin liquidity to Federal Reserve funding circumstances.