The stablecoin market cap jumped from $200 billion to $309 billion between July and November 2025, prompting issuers to buy $109 billion in US Treasury payments to adjust to a federal mandate embedded within the GENIUS Act.
This dramatic development marks a major shift in how the US authorities funds its operations. The shift transfers regulatory oversight for stablecoins from the Federal Reserve to the Treasury Division by means of a brand new digital greenback coverage.
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Legislative Framework Drives Treasury Demand
On July 18, 2025, President Donald Trump signed the Guiding and Establishing Nationwide Innovation for US Stablecoins (GENIUS) Act, creating the primary federal guidelines for fee stablecoins. The legislation requires all stablecoin issuers to again tokens 100% with US {dollars} or short-term Treasury payments. It excludes company bonds and financial institution deposits.
This key provision converts stablecoins into engines for presidency debt purchases. Every time a stablecoin is issued, the corporate should concurrently buy Treasury securities of equal worth. Consequently, there’s an computerized, ongoing demand for federal debt exterior conventional bond auctions.
Analyst Shanaka Anslem Perera defined the implications in an in depth evaluation, noting that this requirement is tucked away inside 47 pages of the technical regulation. The European Central Financial institution reported in November 2025 that the worldwide stablecoin market surpassed $280 billion, led by Tether at $184 billion and USD Coin at $75 billion in market capitalization.
Treasury Secretary Scott Bessent underscored the Act’s strategic significance in his official assertion after its passage. He referred to as stablecoins a vital shift in digital finance that strengthens the US greenback worldwide. Bessent predicted that stablecoins would attain $3 trillion by 2030, yielding $114 billion in authorities financial savings annually.
Quantifying the Fiscal Affect
The connection between stablecoin enlargement and borrowing prices reveals the legislation’s intent. Financial institution for Worldwide Settlements findings present {that a} $3.5 billion enhance in stablecoin market cap reduces authorities borrowing prices by 0.025%. The evaluation references these findings. On the projected $3 trillion mark, this might save the US $114 billion a 12 months, or $900 per family.
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“The federal government doesn’t want to search out consumers for its debt anymore. The legislation creates the consumers routinely. Each time somebody wherever on the earth buys a digital greenback, a stablecoin firm is legally required to purchase a Treasury invoice with that cash.”
Between July and November, mandated Treasury purchases totaled $109 billion in simply 120 days. On common, stablecoin issuers purchased about $908 million in authorities debt every day—a quantity rivaling conventional establishments and central banks.
Throughout remarks on the Treasury Market Convention on November 12, 2025, Secretary Bessent stated public sale sizes would stay regular because of stablecoin-driven demand. This demonstrates digital greenback adoption as a parallel funding supply for federal operations.
A Brookings Establishment evaluation in October 2025 supported these projections. The examine suggests stablecoins may generate $2 trillion in further demand for US authorities debt. This improvement would essentially reshape world markets by changing crypto adoption into Treasury purchases.
Regulatory Shift: Fed to Treasury
The GENIUS Act transferred central oversight of stablecoin issuers to the OCC, a part of the Treasury Division. In July, OCC, the Workplace of the Comptroller of the Foreign money, introduced it could supervise each financial institution and nonbank stablecoin issuers.
This shift removes stablecoin regulation from the Federal Reserve and consolidates it inside the Treasury’s government department company. The Treasury now holds important affect over financial situations by means of digital asset coverage. This affect extends past rate of interest choices or market operations.
JPMorgan’s transfer to just accept Bitcoin as collateral after years of reluctance displays institutional recognition of this regulatory realignment. The nation’s largest financial institution sometimes solely shifts course in response to important adjustments in coverage and market construction.
Observers observe that each Treasury officers and personal actors, corresponding to David Sacks, performed a job in shaping this course of. One analyst remarked that Bessent and Sacks demonstrated strategic imaginative and prescient by means of their regulatory strategy. They shifted management from the Fed to the Treasury whereas utilizing stablecoins to assist finance US debt.
The Treasury launched a public remark interval in September 2025 for the implementation of the GENIUS Act, masking reserve and eligible asset tips. This ongoing rulemaking course of alerts the continuous refinement of the stablecoin-Treasury hyperlink because the market nears trillion-dollar ranges.