U.S. Treasury Secretary: Digital assets may bring $2 trillion in Treasury demand, stablecoins are the key driving force.

Source: cryptoslate

Compiled by: Blockchain Knight

U.S. Treasury Secretary Scott Bessent stated that in the coming years, the demand for U.S. government bonds in the digital asset space may surge, with a potential scale of up to $2 trillion.

Bessent made the above remarks at a hearing held by the House Financial Services Committee on the global financial system, where he emphasized the increasing financial importance of digital assets to the broader economy.

Bessent stated that the United States must take a leadership role in establishing global standards for the crypto asset market, noting that the U.S. has an opportunity to benefit while guiding innovation.

He pointed out that the integration of stablecoins and other blockchain-based financial products with the US dollar and the US Treasury market is deepening, indicating that digital assets can support the national financial interests of the United States.

The growth of stablecoins drives demand for government bonds.

The majority of expected demand comes from stablecoins. Currently, stablecoins heavily rely on U.S. short-term Treasury bonds to maintain their reserves.

As of the end of March, Tether, the world's largest stablecoin issuer, held nearly $120 billion in short-term U.S. Treasury securities as reserves for USDT. Meanwhile, as of February 2025, Circle, the issuer of USDC, reported holding over $22 billion in U.S. Treasury securities.

With the increase in the circulation of stablecoins and the rise in global demand, the demand for low-risk assets such as government bonds as corresponding collateral has also grown.

The connection between digital assets and the U.S. debt market is becoming increasingly close, as private stablecoin issuers are increasingly becoming stable institutional buyers of U.S. Treasury securities.

This emerging demand source may add new resilience and liquidity to the U.S. Treasury market, especially in the context of widespread concerns about overseas investors' willingness to purchase U.S. Treasury bonds.

The U.S. Congress weighs new legislation

The proposed legislation aims to clarify the role of stablecoin issuers within the ecosystem of the U.S. Treasury market, further reinforcing expectations of potential demand growth.

The currently under review in Congress 2025 Stable Coin Trust and Bank License Enforcement Act (STABLE Act of 2025) and 2025 Government Digital Currency Innovation and User Safety Act (GENIUS Act of 2025) both require stablecoin issuers to fully collateralize their issued stablecoins with high-quality liquid assets, including short-term government bonds.

However, due to political differences between the Democratic and Republican parties, these bills may face delays. Recently, nine lawmakers withdrew their support for the bill, citing that it lacks sufficient rules to protect investors.

If these bills are passed, they will effectively require the entire stablecoin industry to invest in government bonds, thereby integrating digital dollars more deeply into the U.S. financial infrastructure.

Proponents of these bills believe that such regulations will enhance people's trust in stablecoins while solidifying the dollar's dominance in the digital market.