While attention remains on Jerome Powell’s rate signals, stablecoins are quietly influencing Treasury liquidity, prompting debate over whether they stabilize markets or increase risk.
The market has nearly doubled to $280 billion over the past year, with most stablecoins backed by short-term Treasuries. According to OKX Singapore CEO Gracie Lin, this links crypto liquidity more directly to Federal Reserve policy than ever before.
“Stablecoins are providing stronger long-term price signals,” Lin told CoinDesk. “The next step is unification — creating a market that delivers liquidity, efficiency, and true utility for investors.”
Coinbase analysts project the market could grow to $1.2 trillion by 2028, requiring $5.3 billion in weekly Treasury purchases. While inflows may reduce yields slightly, redemption surges could trigger forced selling and drain liquidity.
The debate is split: Barry Eichengreen warns of a potential 2008-style liquidity crunch, while former U.S. Comptroller Brian Brooks says Treasury-backed stablecoins mirror historic banking reforms, providing safety. Coinbase’s models suggest stablecoins shave basis points off yields, highlighting their growing influence on the broader financial system.
Market Snapshot
- BTC: Above $111,300, trading in a tight range amid macro caution.
- ETH: $4,320, up 0.6%, showing renewed altcoin demand.
- Gold: Surpasses $3,540 an ounce, driven by Fed rate cut expectations and geopolitical uncertainty.
- Nikkei 225: Stable, supported by foreign inflows and Japan-focused capital trends.
