Stablecoin Issuers Flood US Treasuries as Institutions Shift Focus
Bitwise CIO Matt Hougan predicts that stablecoins will rise significantly in the coming years. According to research from the San Francisco Federal Reserve, stablecoin issuers have already made a substantial impact on the market by becoming substantial new buyers of US Treasury securities.
The Fed's research found that between 2021 and mid-2026, stablecoin issuers collectively added approximately $200 billion in Treasury holdings. This growth has been steep, with their holdings expanding more than tenfold within five years.
Interestingly, the buying is concentrated in a few places, with the two largest stablecoins accounting for most of the activity and favoring short-term Treasury instruments. A stablecoin promises to be redeemable at a fixed value, usually one dollar, making it a natural backing asset for a token that is supposed to hold steady.
Hougan's view on the matter is that financial advisors are showing more interest in stablecoins and tokenization than in Bitcoin as a speculative investment. Real-world use cases, not price charts, dominate the discussion among institutions, who see it reshaping how they think about capital markets and payments.