Media in the US: Stablecoins are absorbing a large amount of US Treasury bonds, with their market value surging from $20 billion in 2020 to $300 billion, and the Federal Reserve expects it may reach $3 trillion within five years.
This cryptocurrency that is pegged to the US dollar uses US Treasury bonds as its main collateral. The US Treasury bonds held by issuers such as Circle and Tether have exceeded those held by major creditor countries like Saudi Arabia and South Korea.
Supporters argue that this can strengthen the dominance of the US dollar, reduce the cost of cross-border payments, and lower Treasury yields; however, regulators and bankers are concerned about systemic risks - during the crypto market crash between 2022 and 2023, stablecoins briefly "unpegged," and if a run occurs in the future, it could lead to panic selling in the US Treasury market.
The Trump administration is pushing the GENIUS Act to expand the use of stablecoins, while Federal Reserve officials have warned that it may transmit liquidity pressure to the banking system, and the un-insured deposits and other collateral allowed by the new law pose potential risks.
Original article: toutiao.com/article/1859105095735303/
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