Key takeaways

1. Roughly $295 billion of stablecoin supply supports an estimated $170 billion of incremental U.S. Treasury demand. Headline issuance overstates the pass-through, because part of that supply replaces instruments that already hold Treasuries. Sizing the Treasury impact means separating gross supply from net new demand.
2. Use cases decide whether stablecoin demand is substitutive or incremental. Yield-bearing balances held on U.S. exchanges behave like bank deposits or money market fund sweeps and carry the lowest Treasury impact factor in the analysis, 0.42. Payments, DeFi infrastructure and dollar savings by non-U.S. users generate the most durable new demand, led by payment-driven usage on Tron at 0.75.
3. Stablecoins function as dollar infrastructure, not only as reserve-backed assets inside the crypto economy. As institutional adoption accelerates and regulation settles under the GENIUS Act, stablecoins increasingly serve as settlement, liquidity and funding rails. At the paper's overall impact factor of 0.58, the $3 trillion market Treasury Secretary Scott Bessent estimates stablecoins could reach by 2030 would generate $1.7 trillion of incremental Treasury demand.

Abstract

As stablecoins scale, they are often framed as a direct source of U.S. Treasury demand because their reserves sit in short-dated U.S. Treasury bills and Treasury-collateralized reverse repo. This paper challenges the assumption that supply growth translates mechanically into proportional Treasury purchases. The Treasury impact of stablecoins depends on how they are used as much as on how much is issued.

Using Allium wallet and transaction labeling, the paper classifies stablecoin supply by use case: U.S. and offshore exchanges, consumer wallets on Ethereum, payments on Tron, lending, decentralized exchanges, perpetual futures venues and bridges. Each category carries a Treasury impact factor that reflects reserve composition and how far its balances substitute for money market funds and bank deposits. Balances that recycle existing dollar liquidity, such as yield-bearing holdings on U.S. exchanges, absorb little new Treasury issuance. Uses that expand dollar access in dollar-scarce environments or run onchain financial operations generate genuinely incremental demand.

The framework separates where stablecoins reinforce Treasury demand from where the impact is overstated. Because the dataset is composable, the assumptions can be re-run as regulation, yields and industry structure shift, and as institutions adopt stablecoin infrastructure the balance may tilt further toward substitutive liquidity rather than net new dollar demand.

Download the full paper for the category-level breakdown and methodology.

Informational only. Not investment advice.