Journal Article

Stablecoins Could Increase Treasury Demand, but Only by Reducing Demand for Other Assets

Abstract: Many expect the establishment of a U.S. framework for stablecoins to increase demand for Treasuries, thereby supporting the Treasury market. Although stablecoin issuers are currently only a small part of the Treasury market, they could become a much larger part under some external projections. However, such a large funding shift could have important implications for other parts of the economy, such as a possible reduction in the supply of credit.

Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Bulletin

Publication Date: 2025-08-08

Pages: 4