Stablecoin issuers have replaced 40% of China’s lost US Treasury demand

Key points

• Tether and Circle added about $200 billion in Treasuries and repos over five years, equal to over 40% of China's holdings decline, San Francisco Fed researchers said.
• Researchers noted stablecoin issuers buy mostly short-term bills, while China's reductions were concentrated in longer-dated debt, so the demand is not directly equivalent.
• The Fed said extending recent growth rates would lift issuers' holdings toward $400 billion by 2030, while cautioning the estimate carries substantial uncertainty.

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