Is the stablecoin a continuation of the US dollar hegemony or a savior of US bonds?? Written at the beginning, this tweet will be very obscure and not suitable for reading. Only through the speech of Federal Reserve Governor Waller, targeted analysis is conducted on the Fed's understanding of the US dollar stablecoin and its assistance to the US Treasury. 1、 The relationship between the size of US dollar stablecoins and short-term US Treasury bonds. Waller mentioned that the stable currency supported by the US dollar may create a new channel to directly connect the global liquidity demand to the US treasury bond bond market. The focus of this sentence is not on cryptocurrency trading itself, but on the balance sheet behind stablecoins. On the surface, the US dollar stable currency is a trading medium in the cryptocurrency market, but on the bottom, it is increasingly like a new US dollar cycle issued by the private sector, reserved by US treasury bond bonds, and co financed by global users. Users get USD on the chain, such as USDT and USDC, while issuers get USD debt with almost zero interest rate. The reserve side buys cash, short-term US treasury bond bonds and overnight treasury bond bond repurchases. Finally, the US Treasury Department obtains a batch of new short-term bond buyers. The latest data shows that the total market value of stablecoins is approximately 315 billion US dollars, of which USDT is about 186.1 billion US dollars and USDC is about 74.5 billion US dollars, totaling over 260 billion US dollars, accounting for more than 80% of the entire stablecoin market. At present, when discussing the relationship between stablecoins and US Treasury bonds, the core is basically to discuss the balance sheets of these two dollar stablecoin giants. According to Tether's data, as of the first quarter of 2026, Tether's token related liabilities amounted to approximately $183 billion, with direct and indirect US Treasury exposure of approximately $141 billion, accounting for nearly 77% of the total liabilities. The circulation of the USDC in Circle at the end of the first quarter was about 77 billion US dollars. The Circle Reserve Fund mainly allocated cash, short-term US treasury bond bonds and overnight treasury bond bond repurchases. 2、 The stablecoin of the US dollar has become a "new channel" for the hegemony of the US dollar. Previously, overseas demand for US dollars mainly entered US dollar assets through systems such as bank accounts, offshore US dollar markets, money market funds, correspondent banks, and foreign exchange swaps. Now stablecoins have added a lighter channel. A Latin American user, Asian trader, Middle Eastern merchant, or African freelancer can hold assets denominated in US dollars as long as they have access to on chain wallets. Users may not necessarily know what they are buying behind the scenes, but in order to maintain redemption, issuers will ultimately put a large amount of reserves into US short-term bonds and short-term US dollar liquidity instruments. The IMF estimates that over 70% of the cumulative net inflow of fiat currency from 2021 to 2025 will come from non US dollar currencies. This means that the expansion of stablecoins is not just about changing the account form within the US dollar system, but also transforming the payment, trading, and hedging needs of non US dollar economies into demand for US dollar reserves. In other words, users in Chinese Mainland who might not have bought US bonds, because they used USDT, they passively bought US bonds with RMB without paying any interest. So the growth of US dollar stablecoins is subtle for the United States. The more global users need on chain US dollars, the larger the issuance of stablecoins, and the more issuers need to reserve assets. 3、 The stablecoin of the US dollar has little impact on long-term US bonds, but it has practical help for short-term US bonds. The more the reserve assets are biased towards short-term treasury bond, the more a global, private and on chain distribution channel for short-term bonds will be available to the US Treasury. This is a bit like strengthening the position of the US dollar in the offshore US dollar market in the past, but this time the interface has changed from a bank account to a wallet address. In the BIS data from 2021 to March 2026, a net inflow of $3.5 billion in stablecoins can cause a decrease of about 0.71 basis points in the yield of 3-month US Treasury bonds on the same day, and a cumulative decrease of about 4 basis points within 10 days. The impact is mainly concentrated on short-term bonds, with weak transmission to long-term bonds. This shows that the stable currency is not big enough to determine the entire US debt market, but it has marginal pricing power at the short end, especially when the liquidity of the treasury bond bond market is tight. This also explains why the attitude of US regulators towards stablecoins is becoming increasingly clear. As long as the US dollar stablecoin is supported by cash, short-term bonds, and repurchases, the expansion of stablecoins will strengthen the demand for US dollar assets. Private companies (such as Circle and Tether) are responsible for issuing and distributing US dollar stable currency, US treasury bond bonds are responsible for providing credit base, global users are responsible for providing funds, and exchanges, wallets and payment companies are responsible for expanding usage scenarios. 4、 After scaling up, the reach of the US dollar will become wider than that of the traditional banking system. Based on the current market value of $315 billion in stablecoins, if 70% to 80% of it is ultimately deposited in cash, short-term bonds, and repurchases, it corresponds to a demand for short-term US dollar assets in the range of $220 billion to $250 billion. Assuming the future stablecoin market reaches $1 trillion, with a reserve allocation of 70% to 80%, corresponding to $700 billion to $800 billion in short-term bonds, repurchases, and cash pools. The current balance of US Treasury bonds is about $6.76 trillion, which is enough to change the buyer structure of the short-term bond market. Of course, this cannot be simply understood as' the larger the stablecoin, the more stable the US Treasury '. The source of funding is crucial. If the increment of stablecoins comes from the real dollarization demand of non dollar economies, then the United States is equivalent to obtaining new external financing channels. If the increase mainly comes from domestic bank deposits and the migration of money market funds in the United States, it is only an internal exchange within the financial system. The banking system may lose some deposits, and there may be new buyers in the short end of US Treasury bonds. The risk will shift from the bank balance sheet to the reserve management of stablecoin issuers. 5、 The real risk of USD stablecoins lies in reverse redemptions. Buy short-term bonds when issuing stablecoins, and release liquidity when redeeming them. Small scale redemptions can be resolved through bank cash and repurchase maturity, while large-scale redemptions may require selling treasury bonds or rapidly reducing repurchase positions. Chain panic will propagate back to the US currency market along the same channel. When stablecoins expand, they lower the short-term yield, and when stablecoins run, they push up the short-term yield, and the impact of redemptions is often more urgent than issuance. So stablecoins are helpful for the US Treasury, but mainly for the short end. It can increase the demand for short-term treasury bonds, reduce some short-term financing pressure, and improve the absorption capacity of short-term bonds, but it is difficult to solve the real buying problem of 10-year and 30-year bonds. The core of the US debt problem is still the fiscal deficit, term structure and long-term interest rate. Stablecoins can help the United States sell more short-term bonds, but they will make US fiscal financing more reliant on short-term rolling. Once short-term interest rates remain high, the transmission of interest costs will also be faster. So using stablecoins or Bitcoin to convert bonds is a joke in itself. At least it's driving now. From a larger perspective, the stablecoin of the US dollar may become the new outer layer of the US dollar system. The inner layer is the Federal Reserve and bank reserves, the middle layer is the US treasury bond bonds, repo and monetary funds, and the outer layer is the chain dollars issued by private institutions. Global users holding stablecoins are equivalent to holding a private US dollar liability, while issuers holding US bonds are equivalent to consolidating user needs and submitting them to the US Treasury Department. The larger this cycle, the stronger the network effect of the US dollar, and the deeper the coupling between the US Treasury short end and the cryptocurrency market. 6、 Summary The trend highlighted by Waller is that stablecoins have evolved from encrypted trading tools to the edge infrastructure of the US dollar system. The stablecoin of the US dollar connects global payment demand, on chain settlement demand, hedging demand, and US short-term bond demand together. For the United States, this is an extension of the dollar hegemony. For the market, this is a new liquidity channel. For regulators, this is a new systemic risk interface. When looking at stablecoins, we cannot only look at the on chain issuance volume. We not only need to see how many short-term bonds, repurchases, and cash have been bought behind the scenes, but also whether these funds come from within the US dollar system or from the new dollarization demand of non US dollar economies. end Bitget is here, VIP! 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