Trump's Digital Asset Policy Expected to Increase Demand for U.S. Treasury Bonds

Analysis suggests that President Donald Trump's digital asset policy will support the U.S. Treasury's bond management strategy. As the stablecoin market grows, demand for U.S. short-term Treasury bonds is expected to increase, potentially lowering the government's borrowing costs. If stablecoins grow to a size of $4 trillion, it has been projected that by 2030, the amount of U.S. short-term Treasury bonds held could reach about 25% of the total issuance. The Wall Street Journal (WSJ) reported that the expansion of stablecoins could support Treasury Secretary Scott Vessen's bond management strategy. Under the GENIUS Act enacted last year, stablecoins can use U.S. Treasury bonds maturing within 93 days as reserve assets. Currently, the market capitalization of stablecoins is approximately $300 billion, which is relatively small compared to the size of U.S. money market funds (MMFs) at about $8 trillion. Secretary Vessen has projected that the stablecoin market could grow to $4 trillion. According to analysis from the Brookings Institution, stablecoins are backed by about 80 cents of short-term Treasury bonds for every dollar. If foreign funds move into dollar stablecoins, there is a possibility of new demand for U.S. short-term Treasury bonds. TD Securities mentioned that the spread of stablecoins could influence the Treasury Department's debt management decisions. However, the actual growth of the stablecoin market remains uncertain, and the Brookings Institution pointed out the need to verify the stability of the new demand for Treasury bonds.

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