It has become much ado on the hug of cryptography with open arms of US president Donald Trump.
A theory is that the kindness of the White House towards digital assets is a favor for Silicon Valley donors, a gesture for friendly constituencies with innovation. Another is that it reflects an administrative belief in the efficiency gains that Blockchain can contribute to payments.
Both explanations may have some real. But they lose a more pressing and little analyzed reason: the United States has a debt problem. And the challenge is not just how much the United States owes ($ 37 billion and counting) either, it is who will continue to buy that debt.
Foreign buyers of the United States Treasury Bonds, for a long time, the reliable unconditional of US loans, are retiring. Among other examples, China’s holdings fell to the lowest since 2009, while Japan, once the largest foreign holder, has also been cutting.
With interest rates even exceeding 4%, Washington is fighting for new sources of demand.
The Secretary of the Treasury, Scott Besent, who describes himself as first as a seller of the United States, believes he has found a stable source in Crypto. His new unlikely customers: Stablecoins.
Stablecoins as treasure buyers
Stablecoins, digital tokens linked to the dollar, now represent one of the fastest growing sources of the demand for US debt.
To understand why this is significant, it is first important to understand mathematics: every $ 1 deposited in Stablecoins results in approximately $ 0.90 that flow to treasure bonds. Compare that with US bank deposits, where only ~ 11% of the funds ultimately in treasure bonds. The difference is marked. In other words, the game plan is quite simple: every dollar that flows from a bank deposit and in a stablecoin produces around $ 0.79 in the new net demand of the treasure.
This explains how Tether, the largest station in Stablecoin, became a treasure treasure of the 20 best, with more than $ 125 billion in debt in the United States. Circle, which emits USDC, is not far away. Together, now they have more treasures than some sovereigns, classifying around the 18th largest headline worldwide.
In summary: Stablecoins are not just a tool for cryptographic merchants. They have become a unique efficient channel for treasure demand.
Clean the track
It seems that there is no accident, then, that the Trump administration has cleared the track for a stable domestic boom.
The Genius Law, approved in July, requires that the stable be supported one for one for one for cash or short -term treasure bonds, effectively channeling entries to government debt. A Compition Digital Asset Market Clarity Law promises the first federal rules book for cryptographic investment. Besent himself has not been shy on this issue, publicly calling Stablecoins a way to increase the demand for the debt of the United States government and the dominance of the US dollar worldwide.
Other steps of the administration also seem to support this theory and strategy. A strategic Bitcoin reserve and storage of broader US digital assets, sown with cryptography seized by the police, said the government sees digital assets as part of its financial tool game. In addition, a recent executive order prevented banks from blocking cryptographic transactions, lowering friction for both retail and institutions. Another rule change opened the door for 401(K) retirement savings to invest in digital assetscreating a new and powerful capital channel.
Each initiative reduces the perceived risk of cryptography, attracts the new participants and, ultimately, pushes more dollars to stable, and by extension, to the treasure bonds.
Traps and risks
Despite all his impulse, Besent’s strategy is not exempt from dangers. Stablecoins are still small in relation to the US $ 50 billion financial system, and their demand can be volatile. If the feeling becomes cryptographic adoption posts, the treasure offer could be reduced as fast as it has grown, leaving Washington once again looking for buyers.
Even if the growth continues, the mechanics of Stablecoin reserves have distorted effects. Because the emitters are restricted to having only effective and short -term treasure bonds, their increase channels require almost exclusively at the head of the performance curve. This concentration inclines the issuance of bonds with a longer date and can remodel the expiration profile of the US debt so that the political leaders did not expect.
Finally, it is unlikely that banks give ground in silence. The stable deposit flight is a direct threat to its business model, which depends on capturing the performance of US dollars. That is precisely the reason why the Genius law prohibits emitters from offering tokens with performance. But the solutions are already being explored, establishing a competitive struggle on who earns the performance of the dollars that support the stablecoin.
Conclusion
The predominant narrative is that Trump’s cryptographic pivot is innovation or please Silicon Valley. Reality seems more pragmatic and more urgent. The stable are positioning themselves as a Trojan horse for the demand of the treasure, one that channels the global dollars in the US debt more efficiently than the banks or foreign sovereigns.
It remains to be seen if this gambit is successful or inflates another bubble. But the cryptographic debate rethinks: in the eyes of Washington, Stablcoins is not a secondary show. They can be the ballast that keeps the United States debt machine afloat.
