A few years ago, stablecoins were little more than a convenience for crypto traders — a quick way to park profits without leaving the digital asset ecosystem.
Today, they’ve become a quiet but formidable force in global finance, holding more US government debt than some of the world’s largest economies.
Tether and Circle, the issuers behind USDT and USDC, now collectively manage well over $150 billion in US Treasury bills, overtaking the likes of Germany, South Korea, and the United Arab Emirates in holdings. Tether alone would rank as the 18th-largest holder of US debt worldwide. The surge follows the passage of the GENIUS Act, which granted legal clarity to dollar-backed stablecoins and opened the door for large institutions to use them in mainstream payments and settlements.
The appeal is obvious: stablecoins maintain a one-to-one peg to the US dollar while offering instant, low-cost transfers across borders — something even the fastest traditional banking rails struggle to match. Their growing adoption has pushed market caps to record highs, with USDC climbing nearly 90% in a year to reach $65 billion.
In terms of transaction activity, stablecoins are now on par with — and in some cases surpassing — payment giants like Visa, largely due to their dominance in crypto trading. But cross-border commerce and corporate treasury use are catching up fast, with nearly half of surveyed institutions reporting they’ve integrated stablecoins into operations.
This shift is happening just as long-time US debt buyers like China and Japan scale back their Treasury holdings, creating space for new entrants. Supporters say stablecoin issuers could serve as dependable, long-term buyers, adding stability to the debt market while reinforcing the dollar’s global influence. Critics, however, warn that heavy reliance on a still-young sector could bring liquidity risks if a major issuer loses public confidence.
Either way, what started as a crypto experiment is now shaping bond market dynamics. The question is no longer whether stablecoins have a role in mainstream finance — it’s how big that role will become in the years ahead.
The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/stablecoins-now-outrank-major-economies-in-us-treasury-holdings/