Stablecoin issuers like Tether are growing influential in the US Treasury market, planning to launch a US-only stablecoin by 2025. Experts warn that their use of Treasury yields to invest in Bitcoin may undermine US reserves. Max Keiser expresses deep concerns over the potential systemic risks posed by stablecoins in the financial system, emphasising a speculative attack on the dollar as issuers leverage interest earnings for investments in Bitcoin. Overall, both stablecoin dynamics and AI-powered investment strategies are shifting the landscape significantly.
In today’s US Crypto News Morning Briefing, we’re diving into the notable role of stablecoin issuers in the US Treasury market. There’s an apparent uptick in institutional adoption and an increasing recognition of the regulatory status of dollar-pegged stablecoins. However, experts are cautioning about a potential artificial inflation in the demand for the US dollar due to these developments.
Notably, Tether, the issuer of the well-known USDT stablecoin, is slated to unveil its US-only stablecoin by 2025. Their goal? To establish stablecoins as significant financial instruments, particularly under the directives of the Trump administration. Tether’s market prowess is undeniable; it has catapulted from a mere $2 billion supply to a staggering $200 billion recently.
The US Treasury estimates that stablecoins could potentially swell to a $2 trillion market by 2028, a projection that could surely draw in more participants. Yet, with this growth comes scrutinization. The House Financial Services Committee is expressing concern over these developments, especially pointing to newly proposed USD1 stablecoins linked to World Liberty Financial, which is tied to Trump’s interests.
There’s a rising alarm regarding stablecoin issuers leveraging Treasury yields to finance Bitcoin purchases. Experts suggest this method could have dire consequences for US government reserves. A recent report posits that stablecoin issuers are taking advantage of federal debt instruments to not only back their coins but also to engage in speculative investments that could challenge national strategies, like the proposed US Strategic Bitcoin Reserve.
Max Keiser, a prominent Bitcoin advocate, shared his apprehensions about this growing trend. He argued that using government bonds as collateral poses systemic risks for the global financial landscape. Tether reportedly holds around $120 billion in short-term US Treasury securities and reverse repos, making it one of the largest non-sovereign holders of US debt. Not to be left behind, Circle, the company behind USDC, revealed over $22 billion in Treasury bills as of February 2025.
The strategy of capitalising on high liquidity from government securities allows stablecoin issuers to earn interest, which they can then funnel into riskier ventures like Bitcoin—effectively letting them accumulate Bitcoin at a minimal cost. Keiser criticises this method as not merely speculative but akin to financial manipulation, branding it a mere financial illusion.
As Keiser articulates, this could morph into a systemic threat: “By issuing stablecoins linked to US Treasury bonds, we’re not establishing a bona fide monetary system, but instead creating a financial mirage.” He elaborates, noting the speculative tinges creeping into the market, a behaviour which unsettles the sanctity of the US dollar.
Moreover, the financial frameworks surrounding stablecoins, regardless of their life cycle of creation and use, have Keiser warning about a looming financial crisis akin to a pandemic for the dollar. He describes current fiscal policies as akin to providing a “quick fix” leading towards the dollar’s eventual demise.
On a more futuristic note, Keiser also commented on the evolution of investment strategies involving artificial intelligence in the crypto space. High-profile individuals, including Michael Saylor and Vivek Ramaswamy, are reportedly seeking to leverage AI to maximise Bitcoin investments. Keiser posited that these techniques reflect a monumental shift in financial strategies that may allow Bitcoin to thrive even more.
In summary, as the stablecoin market blends deeper into the Treasury framework, many analysts will be watching closely, not just for its economic implications, but also how innovative technologies could reshape investment landscapes too.
As always, BeInCrypto has reached out to Tether and Circle for comments and hopes to bring updates if they respond shortly. Keep an eye on the fluctuating markets today as more news unfolds!
