2025-11-25 08:54 |
The stablecoin market cap jumped from $260 billion to $304 billion between July and November, prompting issuers to purchase $44 billion in US Treasury bills to comply with a federal mandate embedded in the GENIUS Act.
This dramatic growth marks a significant shift in how the US government finances its operations. The shift transfers regulatory oversight for stablecoins from the Federal Reserve to the Treasury Department through a new digital dollar policy.
Legislative Framework Drives Treasury DemandOn July 18, 2025, President Donald Trump signed the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, creating the first federal rules for payment stablecoins. The law requires all stablecoin issuers to back tokens 100% with US dollars or short-term Treasury bills. It excludes corporate bonds and bank deposits.
This key provision converts stablecoins into engines for government debt purchases. Each time a stablecoin is issued, the company must simultaneously purchase Treasury securities of equal value. As a result, there is an automatic, ongoing demand for federal debt outside traditional bond auctions.
Analyst Shanaka Anslem Perera explained the implications in a detailed analysis, noting that this requirement is tucked away within 47 pages of the technical regulation. The European Central Bank reported in November 2025 that the global stablecoin market surpassed $280 billion, led by Tether at $184 billion and USD Coin at $75 billion in market capitalization.
EVERYONE THOUGHT THE GENIUS ACT WAS ABOUT CRYPTO REGULATION. THE DATA JUST PROVED IT WAS SOMETHING ELSE ENTIRELY.
Four months ago, Trump signed a law that made headlines for 48 hours. Tech regulation. Stablecoin rules. The market moved on.
But the numbers that just came out… pic.twitter.com/133ihg1BQq
Treasury Secretary Scott Bessent underscored the Act’s strategic significance in his official statement after its passage. He called stablecoins an essential shift in digital finance that strengthens the US dollar worldwide. Bessent predicted that stablecoins would reach $3 trillion by 2030, yielding $114 billion in annual government savings.
Quantifying the Fiscal ImpactThe relationship between stablecoin expansion and borrowing costs reveals the law’s intent. Bank for International Settlements findings show that a $3.5 billion increase in stablecoin market cap reduces government borrowing costs by 0.025%. The analysis references these findings. At the projected $3 trillion mark, this could save the US $114 billion a year, or $900 per household.
“The government doesn’t need to find buyers for its debt anymore. The law creates the buyers automatically. Every time someone anywhere in the world buys a digital dollar, a stablecoin company is legally required to buy a Treasury bill with that money.”
Between July and November, mandated Treasury purchases totaled $44 billion in just 120 days. On average, stablecoin issuers bought about $366 million in government debt each day—a volume rivaling traditional institutions and central banks.
During remarks at the Treasury Market Conference on November 12, Secretary Bessent said auction sizes would remain steady thanks to stablecoin-driven demand. This demonstrates digital dollar adoption as a parallel funding source for federal operations.
A Brookings Institution analysis in October supported these projections. The study suggests stablecoins could generate $2 trillion in extra demand for US government debt. This development would fundamentally reshape global markets by converting crypto adoption into Treasury purchases.
Regulatory Shift: Fed to TreasuryThe GENIUS Act transferred central oversight of stablecoin issuers to the OCC, part of the Treasury Department. In July, OCC, the Office of the Comptroller of the Currency, announced it would supervise both bank and nonbank stablecoin issuers.
This shift removes stablecoin regulation from the Federal Reserve and consolidates it within the Treasury’s executive branch agency. The Treasury now holds significant influence over monetary conditions through digital asset policy. This influence extends beyond interest rate decisions or market operations.
JPMorgan’s move to accept Bitcoin as collateral after years of reluctance reflects institutional recognition of this regulatory realignment. The country’s largest bank typically only shifts course in response to significant changes in policy and market structure.
Observers note that both Treasury officials and private actors, such as David Sacks, played a role in shaping this process. One analyst remarked that Bessent and Sacks demonstrated strategic vision through their regulatory approach. They shifted control from the Fed to the Treasury while using stablecoins to help finance US debt.
The Treasury launched a public comment period in September to implement the GENIUS Act, covering guidelines for reserves and eligible assets. This ongoing rulemaking process signals the continual refinement of the stablecoin-Treasury link as the market nears trillion-dollar levels.
The post How Stablecoins Back US Debt With $44B in T-Bill Buys appeared first on BeInCrypto.
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