Abstract
Stablecoins are increasingly influencing international finance and U.S. fiscal stability. Their rapid adoption, driven by lower transaction costs, enhanced speed, transparency, and reduced entry barriers, notably in remittance corridors and regions experiencing high inflation or currency depreciation, has raised demand for short-term U.S. Treasury bonds. As stablecoin issuers become major holders of Treasuries, they are reshaping global demand and market dynamics. While stablecoins present fiscal advantages and efficiency gains, they could also introduce systemic risks, regulatory arbitrage concerns, and potential currency substitution threats, necessitating rigorous regulatory frameworks and international policy coordination.
Authors
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