Stablecoins Accelerate Demand for U.S. Treasuries, Reinforcing Dollar Strength — Citi

Citi: Stablecoins Drive Treasury Bill Demand, Underscore Dollar’s Lead in Global Finance

Stablecoins are increasingly anchoring themselves in the traditional financial system, with rising demand for short-term U.S. Treasuries among issuers, according to a new report from Citigroup.

The bank noted that while stablecoin reserves are boosting T-bill demand, the net effect may be moderated as funds shift from existing money market instruments. New legislation under consideration in Congress could cement this trend, potentially requiring stablecoin reserves to consist primarily of short-duration government debt.

Citi emphasized that the U.S. dollar’s dominance in stablecoin markets — led by issuers like Tether (USDT) — stems from its broader role as the global reserve currency. Rather than driving dollar supremacy, stablecoins are a reflection of it.

Major payment players such as PayPal (PYPL) and Visa (V) are also entering the stablecoin arena, signaling broader institutional interest.

Citi estimates the stablecoin market could grow to $1.6 trillion–$3.7 trillion by 2030, though regulatory caps on yield could act as a speed bump.

Even so, the report concludes that stablecoin trends could serve as a “real-time indicator” of shifts in the global monetary system.