Stablecoin issuers added about $200 billion in Treasury holdings, San Francisco Fed says

Research from the Federal Reserve Bank of San Francisco found that stablecoin issuers Tether and Circle added about $200 billion in Treasury and repo holdings². KuCoin reported the finding as issuers such as Tether and USDC adding approximately $200 billion in US Treasury assets over five years, offsetting more than 40% of a decline elsewhere⁵. CryptoRank and CryptoSlate both framed it as stablecoin issuers replacing 40% of China’s lost US Treasury demand^1,3.

The two sides of that comparison are not the same size. CryptoRank put issuers’ Treasury holdings as nearing $200 billion while China’s fell toward $600 billion¹. CryptoSlate contrasted China’s roughly $600 billion in Treasury holdings with issuers’ nearly $200 billion³.

Why it matters to investors

The maturity profile is the point. The researchers said stablecoin issuers mainly buy short-maturity assets, while China’s reductions ran over the same period². Altcoin Buzz reported that issuers predominantly buy Treasury bills and other highly liquid, short-maturity assets, and cautioned that a larger bill market does not necessarily follow⁴.

Binance reported Tom Lee saying stablecoins are becoming integral to financial system liquidity, citing the San Francisco Fed research on issuers’ increased US Treasury holdings⁶. That is the structural claim under the numbers: a private, redemption-driven buyer has taken a place in the short-dated market previously associated with sovereign holders^1,3,6.

What to watch

Concentration within the sector is high. Tether’s USDT holds 61.0% of stablecoin supply⁷. Ripple added $765 million to stablecoin market capitalisation in the third quarter, trailing only Circle, in a ranking where one issuer holds 0.5% of supply yet still placed in the top three⁷.

Because issuer demand for bills is a function of coin supply, it can reverse as quickly as it arrived, which is the reason the maturity mix matters more than the headline total^2,4. The figures to follow are issuers’ reported reserve composition and the direction of China’s holdings, the two series the San Francisco Fed work places side by side^1,3,5. The five-year window in KuCoin’s account of the research is also the window over which China’s holdings fell, so the offset is a coincidence of timing as much as a substitution^2,5. Nothing in the reporting says issuers were buying because China was selling^1,3,5. The claim in the coverage is narrower than the headlines suggest: issuers’ purchases offset part of a decline, which is an accounting statement about flows rather than a statement about who sets the price of a Treasury bill^2,4.