Stablecoin market capitalization jumped from $200 billion to $309 billion between July and November 2025, prompting issuers to purchase $109 billion in U.S. Treasury bills to comply with federal mandates contained in the GENIUS Act.
This dramatic growth marks a major shift in the way the U.S. government finances its operations. This transition transfers regulatory oversight of stablecoins from the Federal Reserve to the Treasury Department through the new Digital Dollar Policy.
Sponsored Sponsored
Legal framework drives treasury demand
On July 18, 2025, President Donald Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, creating the first federal regulations for payment stablecoins. This law requires all stablecoin issuers to back their tokens 100% with US dollars or Treasury bills. Excludes corporate bonds and bank deposits.
This important provision transforms stablecoins into engines for purchasing government bonds. Every time a stablecoin is issued, companies must simultaneously purchase Treasury securities of the same value. As a result, there is an automatic and continuous demand for federal debt outside of traditional bond auctions.
Analyst Shanaka Anslem Perera explained the implications in a detailed analysis, pointing out that this requirement is hidden on page 47 of the technical regulations. The European Central Bank reported in November 2025 that the global stablecoin market exceeded $280 billion, with a market capitalization of over $280 billion, led by Tether at $184 billion and USD Coin at $75 billion.
Treasury Secretary Scott Bessent emphasized the strategic importance of the law in a public statement following its passage. He said stablecoins are an important change in digital finance that will strengthen the US dollar around the world. Bessent predicted that stablecoins will reach $3 trillion by 2030, generating $114 billion in government savings each year.
Quantify the fiscal impact
The relationship between stablecoin expansion and borrowing costs reveals the intent of this law. A study by the Bank for International Settlements found that a $3.5 billion increase in stablecoin market capitalization would reduce government borrowing costs by 0.025%. We refer to these findings in our analysis. At the projected $3 trillion level, this could save the United States $114 billion annually, or $900 per household.
Sponsored Sponsored
“Governments no longer need to find buyers for their debt; the law automatically creates one. Every time someone in the world buys a digital dollar, a stablecoin company is legally required to buy Treasury bills with that money.”
Treasury purchases mandated from July to November totaled $109 billion in just 120 days. On average, stablecoin issuers buy around $908 million in government bonds each day, an amount comparable to traditional institutions and central banks.
In remarks at the U.S. Treasury Market Conference on November 12, 2025, Bessent said auction sizes will remain stable thanks to stablecoin-driven demand. This indicates the adoption of the digital dollar as a parallel source of funding for federal operations.
An October 2025 Brookings Institution analysis confirms these predictions. The study suggests that stablecoins could create $2 trillion in additional demand for U.S. government debt. This development will fundamentally reshape global markets by turning cryptocurrency adoption into a Treasury purchase.
Regulatory shift: From the Fed to the Treasury
The GENIUS Act transferred central oversight of stablecoin issuers to the OCC, which is part of the Treasury Department. In July, the Office of the Comptroller of the Currency, the OCC, announced it would supervise both bank and non-bank stablecoin issuers.
This transition will remove stablecoin regulation from the Federal Reserve System and consolidate it within the Treasury Department’s executive branch agencies. The Ministry of Finance now has significant influence over the financial landscape through digital asset policy. This influence extends beyond interest rate decisions and market manipulation.
After years of reluctance, JPMorgan’s move to accept Bitcoin as collateral reflects institutional recognition of this regulatory restructuring. The country’s largest banks typically change course only in response to significant changes in policy or market structure.
Observers note that both Treasury officials and private actors, such as David Sachs, played a role in shaping the process. One analyst said Bessent and Sachs demonstrated strategic vision through their regulatory approach. They moved control from the Fed to the Treasury while using stablecoins to help finance US debt.
In September 2025, the Treasury Department began a public comment period to implement the GENIUS Act, which covers reserve funds and eligible asset guidelines. This ongoing rulemaking process shows that the stablecoin-Treasury relationship is continually refined as the market approaches multi-trillion dollar levels.
