According to the minutes from a meeting held on October 30 by the US Department of the Treasury, there appears to be a growing interest in short-term US government bonds, specifically Treasury bills, driven by the demand for stablecoins.
During a meeting on October 29, the US Treasury’s Borrowing Advisory Committee discussed the potential advantages of adopting stablecoins and the concept of tokenizing Treasury bills. One committee member proposed the establishment of a permissioned blockchain specifically for T-bills, as noted in the minutes.
These remarks reflect a budding willingness among US officials to explore the meaningful integration of blockchain technology within the nation’s financial framework. A committee member pointed out that, “since most stablecoin collateral is believed to be comprised of Treasury bills or Treasury-backed repurchase agreement transactions, the rise in stablecoins has likely contributed to a slight uptick in demand for short-dated Treasury securities.”
The committee acknowledged that the tokenization of T-bills “could lead to operational enhancements and drive innovation in the Treasury market,” while also recognizing that it could introduce risks to financial stability. One committee member emphasized that “the tokenization of Treasury assets would probably necessitate the establishment of a privately controlled, permissioned blockchain overseen by a credible government authority.”
Stablecoins, which are digital tokens pegged to the US dollar, are increasingly becoming a fundamental component for trading and payment processes. The total market capitalization of stablecoins reached unprecedented levels in 2024, nearing $180 billion, as reported by CoinMarketCap.
Among the stablecoin landscape, Tether (USDT) leads with a market capitalization of $120 billion. Circle’s USD Coin (USDC) follows as a distant second, valued at around $35 billion, according to CoinMarketCap.
In parallel, tokenized real-world assets (RWAs)—encompassing everything from Treasury securities to artworks—represent a staggering $30 trillion market potential on a global scale, as Colin Butler, Polygon’s global head of institutional capital, shared with Cointelegraph in August.
There is a notable surge in demand for products that facilitate the tokenization of T-bills and other liquid, yield-generating assets. Among the largest funds managing these assets are the BlackRock USD Institutional Digital Liquidity Fund (BUIDL) and the Franklin OnChain US Government Money Fund (FOBXX), boasting assets under management (AUM) of approximately $530 million and $410 million, respectively.