Stablecoins Boost Treasury Bill Demand, Reflect Dollar Dominance, Citi Says

Stablecoins are cementing their role as a bridge between crypto markets and traditional finance, according to Citigroup. Their growing usage is driving demand for short-term U.S. Treasuries, though money market fund substitutions may temper the net impact. Proposed U.S. legislation could accelerate this trend by mandating reserves in government debt.

The dollar’s supremacy in stablecoin issuance mirrors its global reserve currency status rather than reinforcing it. Tether (USDT) and other dollar-pegged stablecoins dominate, underpinned by their utility in crypto trading and blockchain payments. Traditional finance giants like PayPal and Visa are now exploring stablecoin applications.

Citi estimates the potential market could reach $1.6–$3.7 trillion by 2030, though regulatory hurdles like yield restrictions may limit growth. The evolution of stablecoins may serve as a barometer for shifts in the global monetary system.