Peter Schiff Warns Stablecoins Could Undermine Treasury Demand

Peter Schiff, a prominent crypto skeptic, has challenged the narrative that stablecoins boost demand for U.S. Treasury bonds. He argues that stablecoins merely redistribute existing capital rather than injecting new liquidity into the financial system. This shift, he warns, could weaken demand for long-term government debt and elevate borrowing costs for consumers and businesses.

Stablecoin issuers profit from interest accrual instead of users—unlike traditional money market accounts. Schiff contends this dynamic may pressure long-term yields and restrict credit access. His critique contrasts with institutional players like BlackRock, who see stablecoins as a bridge between crypto and legacy finance.

The debate highlights tensions in how crypto innovations interact with macroeconomic stability. As stablecoin adoption grows, regulators face mounting questions about their systemic impact on capital markets and monetary policy transmission.