Stablecoin Issuers Have Accumulated A Significant Share Of The US Treasury Market

Various stablecoin issuers collectively held $80 bln in short-term US government debt as of May 2022, according to a study by investment bank JPMorgan released on August 16.

Tether, Circle and other stablecoin companies accounted for 2% of the entire US Treasury bill market, with a larger share of Treasury bills than Warren BUFFETT'S Berkshire Hathaway. According to the data, stablecoin issuers also outperformed offshore money market funds (MMFs) and primary market MMFs in terms of their share of investment in Treasury bills.

Treasury bills are debt instruments commonly used by companies as a cash equivalent on corporate balance sheets. Tether and Circle — the issuers of the world’s largest asset-backed stablecoins, Tether and USD Coin (USDC) — have pledged to buy U.S. Treasury bills while cutting their reliance on commercial paper earlier this year.

Image: Financial Times