Citi Highlights Stablecoins’ Rising Role in Treasury Demand and Dollar Dominance
As stablecoins continue to gain traction, their influence on U.S. Treasury demand is becoming increasingly pronounced, according to a recent report by Citigroup.
The bank points out that stablecoin issuers are driving higher demand for short-term Treasury bills, though this increase may be partly offset by funds migrating from traditional money market instruments. Upcoming legislation could accelerate this trend by mandating that stablecoin reserves be held in government debt with short maturities.
Citi also stresses that the prominence of dollar-backed stablecoins, such as USDT, mirrors the U.S. dollar’s status as the world’s primary reserve currency, rather than causing it. These tokens remain crucial for crypto trading and blockchain payment networks.
Beyond crypto-native players, major companies like PayPal (PYPL) and Visa (V) are experimenting with stablecoin applications, pointing to broader adoption in mainstream finance.
The stablecoin market could reach between $1.6 trillion and $3.7 trillion by 2030, Citi estimates. However, regulatory constraints—particularly on returns—could limit growth potential.
Ultimately, Citi sees stablecoin trends as a valuable gauge for the future evolution of the global monetary order, highlighting how digital currencies are reshaping the intersection of finance and technology.
