OKG Research: Stablecoins Can Create up to $100 Billion in Demand for U.S. Debt

OKG Research: Stablecoins Can Create up to $100 Billion in Demand for U.S. Debt

A new analysis by OKG Research predicts that stablecoins, such as USDT and USDC, could directly drive up demand for U.S. debt, potentially surpassing $100 billion by 2025. This surge in demand is tied to the continued growth of the stablecoin market, which is expected to exceed $400 billion in market value by 2025, fueled by the advancement of U.S. crypto legislation and the global rise in stablecoin adoption.

Stablecoins have emerged as a major player in the cryptocurrency ecosystem, and their influence on U.S. debt markets is becoming more pronounced. According to the research, stablecoins could become one of the top ten global holders of U.S. debt, creating a significant "invisible pillar" supporting the U.S. debt market. This demand will likely surpass even the indirect contributions made by bitcoin’s strategic reserves.

Currently, stablecoins account for nearly 50% of on-chain activities, with many of the most popular stablecoins, including USDC and USDT, using U.S. debt as their primary collateral. Both of these stablecoins follow a 1:1 mortgage model, backing their value with high-quality assets like U.S. government debt.

To date, USDC has mortgaged over $40 billion in U.S. debt, while USDT has backed more than $100 billion. As the stablecoin market grows, this reliance on U.S. debt is expected to increase, making it a vital component of the broader financial ecosystem.

OKG Research’s report highlights how the growing prominence of stablecoins in the cryptocurrency market could play a crucial role in expanding demand for U.S. debt, potentially creating a new dynamic in global financial markets. As stablecoin adoption increases, the ripple effect on U.S. debt could reshape the way the market operates, positioning stablecoins as a major factor in global finance.