The FT is out with the article, here is a quick summary:
Bessent is courting stablecoin issuers and expects them to become a key source of demand for U.S. Treasuries, especially for short-term bills.
This view is informing plans to tilt issuance toward bills in coming quarters.
JPMorgan’s Jay Barry says Treasury is comfortable emphasizing short-term issuance because it expects real demand from stablecoins.
The July 'Genius Act' created a regulatory framework requiring stablecoins to be backed by ultra-safe, liquid assets (including T-bills), reinforcing the demand channel.
Treasury says the new law should spur stablecoin innovation and expand demand for short-dated Treasuries; issuance will still be guided by broad market input.
Stablecoins aim to hold a $1 peg via portfolios of high-quality short-term debt; the market is ~$250bn today versus a ~$29tn Treasury market.
Bessent has told Congress the stablecoin market could grow to ~$2tn in coming years.
Treasury’s market outreach has intensified since January, with officials expressing greater-than-usual concern about debt demand, according to market participants.
Here is the link to the article.
