US Treasury Secretary: Stablecoin market size will reach $3 trillion in five years, stimulating demand for US Treasury bonds.-OzABC

Amid Wall Street’s intense scrutiny of U.S. Treasury supply and demand, U.S. Treasury Secretary Scott Bessent stated that the stablecoin market will reach $3 trillion by 2030, ten times its current size of $300 billion, and will boost demand for short-term Treasury bills.

Cover image of news article — US Treasury Secretary: Stablecoin market size will reach $3 trillion in five years, stimulating demand for US Treasury bonds.

Stablecoins are a type of cryptocurrency designed to maintain a stable price relative to other assets such as the US dollar. Because stablecoins must be backed by liquid assets—such as cash or US Treasury bonds—issuing stablecoins also creates demand for US Treasury bonds.

In particular, the United States passed and began implementing the “Genius Act” this summer, which will encourage the adoption of cryptocurrencies .

Barron’s reported that Bessant made an optimistic forecast for the size of the stablecoin market at the annual government bond market conference on Wednesday (12th).

Bessant mentioned that future demand for US Treasury bonds will also come from money market funds with a scale of $7.5 trillion, which are major investors in Treasury bills. In addition, reforms to bank capital requirements may further boost demand.

Bessant added, “As the Treasury observes these trends, it will assess whether these changes are structural or temporary, and adjust our long-term debt issuance plans accordingly.”

The U.S. Treasury Department said last week (November 5) that it has begun preliminary consideration of increasing the issuance of long-term debt in the future, but at this stage it will maintain the previous communication that the issuance of long-term debt will “remain stable for at least the next few quarters”.

Bessant’s comments on stablecoins come as stablecoin upstart Circle Internet Group ( CRCL-US ) releases its latest financial report. The company reported significant growth in revenue and profit on Wednesday, and the circulating supply of its stablecoin, “USDC,” more than doubled compared to last year.

Circle CFO Jeremy Fox-Geen stated that stablecoins are the beginning of a “megatrend” in the financial world.

Despite strong earnings, Circle shares plunged 12% on Wednesday, partly due to investor concerns that interest income from Treasury bills, which underpins Circle’s stablecoin assets, would decline as the Federal Reserve cuts interest rates.

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Cryptocurrency Market

US Treasury Secretary: Stablecoin market size will reach $3 trillion in five years, stimulating demand for US Treasury bonds.

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