The stablecoin reality we are unaware of

Stablecoin. It is a cryptocurrency indexed to an asset in Turkish. Stablecoins are very popular today. Some countries are banning them, some are regulating them, and some are still monitoring from a distance. Before stablecoins, cryptocurrency investors were using Bitcoin for exchange purposes as well. Although the existence of stablecoins does not diminish the value of Bitcoin, most investors now buy and sell stablecoins first when there is no trading pair while selling one cryptocurrency and buying another. So, is that all there is to the importance of stablecoins? Are there no other areas or topics where stablecoins are significant?

Can stablecoins shape the world economy?

The importance of the American Dollar worldwide is well known today. Recent research clearly indicates that a substantial portion of stablecoins is indexed to this asset. The dollar, which revolves around global trade and has taken center stage in the world with the Bretton Woods agreement, has now also gained significant importance in the crypto asset space.

So, is this a one-sided relationship?

Not

How?

Today we know how crypto assets indexed to the US dollar are issued. For every dollar issued in USDT or USDC, there must be one dollar held in reserve. Tensions regarding this also occurred between Tether and prosecutors in New York and Washington before legal regulations.

So the question should be this: What do the companies that issue stablecoins do with the crypto assets they hold in their reserves against the issued crypto assets?

The main issuers of stablecoins, Tether and Circle, have predominantly backed their crypto assets with U.S. Treasury bonds and money market instruments, becoming significant players in the short-term borrowing markets. By March 2025, the total assets managed by these cryptocurrencies backed by dollar-denominated assets have exceeded 200 billion dollars. This figure has already surpassed the short-term U.S. securities portfolios of large foreign investors like China.

In 2024, dollar-backed stablecoin projects purchased approximately $40 billion in U.S. Treasury bonds. This is close to the size of the largest U.S. government money market funds and is greater than most foreign investors.

Shouldn't the interaction of stablecoins with traditional asset markets be examined sufficiently now? Isn't it time?

Perhaps the simplest example on this topic could be this: Can stablecoin fund inflows create measurable demand pressure on U.S. Treasury yields?

The Bank for International Settlements conducted a study on this topic. The research is based on daily data from January 2021 to March 2025. To measure stablecoin flows, the market capitalizations of six major dollar-backed stablecoins were aggregated to form a total size, and the 5-day market capitalization changes were used as an indicator for stablecoin inflows.

Have stablecoins gone beyond the world of crypto assets?

Let's list the results reached by the Bank for International Settlements.

Firstly, stablecoin inflows reduce 3-month US Treasury yield by approximately 2-2.5 basis points within 10 days. This is likened to a small-scale easing effect. Stablecoin outflows, on the other hand, have the opposite effect, increasing short-term bond yields.

When the effects are examined based on exporters, it is stated that the inflows of USDT are the most significant factor increasing this pressure, followed by USDC in second place.

It can be stated that stablecoins have now become important players in traditional financial markets and have an impact on market liquidity and interest rates. This situation shows that regulators need to closely monitor stablecoins in terms of monetary policy transmission, financial stability, and reserve transparency.

Therefore, stablecoins should now be regarded not just as a crypto asset, but as a part of the financial system.

Published: June 8, 2025 14:22