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Stablecoin Issuers Propel U.S. Treasury Demand Following Senate Passage of GENIUS Act

Major stablecoin issuers have boosted short-term Treasury holdings in a $256 billion market awaiting House approval of the GENIUS Act’s reserve disclosure regime.

Overview

  • The U.S. Senate passed the GENIUS Act last week to establish monthly reserve disclosures and anti-money laundering requirements for stablecoin issuers.
  • Tether holds over $120 billion in U.S. Treasuries and Circle allocates the majority of USDC reserves to short-dated government debt and repurchase agreements.
  • Stablecoins now invest about 80% of their combined $256 billion market in Treasury bills and repos, representing roughly $200 billion in government debt.
  • Analysts warn that the rapid expansion of stablecoins could outpace Treasury supply and shift U.S. debt issuance toward shorter maturities.
  • Large financial institutions are increasingly seeking stablecoin solutions, driving calls for regulatory guardrails before broader market adoption.