U.S. Treasury Secretary: Digital assets may bring $2 trillion in Treasury bond demand, with stablecoins becoming a key driving force

Original: cryptoslate

Compile:Blockchainknight

U.S. Treasury Secretary Scott Bessent said that in the next few years, demand for U.S. government bonds in the digital asset sector may surge, with a potential scale of up to $2 trillion.

Bessent made the comments during a House Financial Services Committee hearing on the global financial system, where he highlighted the growing financial importance of digital assets to the broader economy.

Bessent said the United States must take a leadership role in setting global standards for crypto asset markets, noting that the U.S. has the opportunity to benefit from innovation while guiding it.

He cited the example of the growing integration of stablecoins and other blockchain-based financial products with the U.S. dollar and U.S. Treasury markets, which shows that digital assets can support the U.S. national financial interests.

Stablecoin growth drives demand for government bonds

Much of the expected demand will come from stablecoins, which currently rely heavily on short-term U.S. Treasury bonds to maintain their reserves.

As of the end of March, Tether, the world's largest stablecoin issuer, held nearly $120 billion worth of short-term U.S. Treasuries as reserves for USDT. Meanwhile, as of February 2025, Circle, the company that issues USDC, reported holding more than $22 billion in U.S. Treasuries.

As the circulation of stablecoins increases and global demand rises, the demand for low-risk assets such as government bonds as corresponding collateral also increases.

The connection between digital assets and the U.S. debt market is becoming increasingly close, as private stablecoin issuers are increasingly becoming stable institutional buyers of U.S. Treasuries.

This emerging source of demand may add new resilience and liquidity to the U.S. Treasury market, especially amid widespread concerns about overseas investors' willingness to buy U.S. Treasuries.

US Congress weighs new legislation

Proposed legislation aimed at clarifying the role of stablecoin issuers in the U.S. Treasury market ecosystem also further reinforces expectations of potential demand growth.

The Stablecoin Trust and Banking Licensing Enforcement Act of 2025 (STABLE Act of 2025) and the Government Digital Currency Innovation and User Rights Act of 2025, which are currently being reviewed by Congress, are also being considered.SafetyThe GENIUS Act of 2025 requires stablecoin issuers to fully collateralize the stablecoins they issue with high-quality liquid assets, including short-term Treasury bonds.

However, the bills could face delays due to political divisions between Democrats and Republicans, with nine lawmakers recently withdrawing their support for the bill, arguing that it lacked rules to adequately protect investors.

If passed, these bills would effectively require the entire stablecoin industry to invest in Treasury bonds, integrating the digital dollar more deeply into the U.S. financial infrastructure.

Supporters of the bills argue that such regulations would bolster trust in stablecoins while cementing the dollar’s dominance in digital markets.

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