The direct demand created for U.S. debt by stablecoins could grow exponentially in 2025.
Stablecoins Can Leverage U.S. Debt for Massive Growth
An analysis by OKG Research predicts that stablecoins such as USDT and USDC will directly increase the demand for U.S. debt in 2025. It is anticipated that the market value of stablecoins will surpass $400 billion in 2025, thanks to the progress of U.S. crypto legislation and the rise in stablecoin usage worldwide.
This could have a spillover effect on U.S. debt with a projection for its value to surpass $100 billion. It is likely that the stablecoin market will be among the top ten global holders of U.S. debt.
According to the analysis, stablecoins will emerge as a significant “invisible pillar” of the U.S. debt market if the cryptocurrency industry keeps up its growth velocity. Their direct demand for U.S. debt will surpass the indirect returns provided by bitcoin’s strategic reserves.
U.S. debt which is among the safest assets in the world is becoming more significant in the crypto market. At the moment, stablecoins account for close to 50% of on-chain activities, and the majority of popular stablecoins use US debt as their primary collateral.
The issuance method of the two most prominent stablecoins in the world, USDC and USDT, necessitates a 1:1 mortgage of high-quality assets, with US debt holding a leading role in this regard. To date, USDC has mortgaged over $40 billion while USDT has mortgaged over US$100 billion in U.S. dollar debt.
