Peter Schiff Challenges Stablecoin Impact on Treasury Bonds

Economist Peter Schiff has ignited a debate by contesting the prevailing narrative that stablecoins bolster demand for U.S. Treasury bonds. In a pointed critique on social media platform X, Schiff argued that stablecoins merely redistribute existing liquidity rather than generating new capital inflows. This reallocation, he contends, fails to structurally increase Treasury purchases and could disrupt the supply-demand equilibrium for long-term bonds.

The crypto market's growth has fueled assumptions that dollar-pegged stablecoins indirectly support Treasury markets. Schiff's analysis upends this view, suggesting potential upward pressure on long-term yields if liquidity flows shift. His remarks challenge both crypto proponents and policymakers who have framed stablecoins as benign or even beneficial to traditional finance.