Bessent's Stablecoin Plan Hits Roadblock as Market Growth Stalls

Treasury Secretary Scott Bessent's plan to make stablecoins a major buyer of US government debt is running into trouble. Stablecoin growth has stalled, and weaker crypto trading is cutting demand for the tokens used by traders to park cash.

Bessent wants stablecoins to become a serious buyer of Treasury bills, but this requires a market that continues to expand rapidly. However, Circle's USDC stablecoin saw its circulation drop from $77 billion in the first quarter of 2026 to $73.3 billion at the end of the second quarter, a decline of nearly 5%.

While some see Bessent's plan as a way to boost demand for Treasury bills and help reduce the government's debt burden, others argue that it may not have the desired effect. The Brookings Institution has suggested that stablecoin growth could create $400 billion to $2.3 trillion in first-round demand for Treasury bills by 2030.

However, this projection depends on a market that continues to grow rapidly, and the current slowdown in crypto trading is making it harder for Bessent's plan to succeed. Additionally, the concentration of stablecoin supply among just a few issuers, such as Tether's USDT and Circle's USDC, raises concerns about the potential impact on demand for Treasury bills.