The FT is out with the article, here is a quick summary:
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Bessent is courting stablecoin issuers and expects them to become a key source of demand for U.S. Treasuries, especially for short-term bills.
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This view is informing plans to tilt issuance toward bills in coming quarters.
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JPMorgan’s Jay Barry says Treasury is comfortable emphasizing short-term issuance because it expects real demand from stablecoins.
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The July ‘Genius Act’ created a regulatory framework requiring stablecoins to be backed by ultra-safe, liquid assets (including T-bills), reinforcing the demand channel.
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Treasury says the new law should spur stablecoin innovation and expand demand for short-dated Treasuries; issuance will still be guided by broad market input.
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Stablecoins aim to hold a $1 peg via portfolios of high-quality short-term debt; the market is ~$250bn today versus a ~$29tn Treasury market.
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Bessent has told Congress the stablecoin market could grow to ~$2tn in coming years.
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Treasury’s market outreach has intensified since January, with officials expressing greater-than-usual concern about debt demand, according to market participants.
Here is the link to the article.
This article was written by Arno V Venter at investinglive.com.