Stablecoin institutions are now the 18th largest holder of US debt

The US government has become a "debtor" of stablecoin organizations, in the context of an unprecedented public debt burden.

According to information from Tagus Capital, stablecoin organizations are holding more than 120 billion USD in US Treasury bonds, making them the 18th largest creditor globally in the United States. This achievement even surpasses countries with large current account surpluses such as Germany and South Korea.

Stablecoins are poised to grow from 0.2% to 10% of global economic money in the next decade, driven by their use in payments, banking the unbanked, and cross-border commerce. Tether (USDT) and Circle (USDC) hold substantial US government debt, ranking 18th… pic.twitter.com/xBaZPIHwBk— Tagus Capital - Web3 Deep Tech (@CapitalTagus) June 20, 2024

Tether alone, the giant behind the stablecoin USDT, owns up to 91 billion USD in treasury bonds. Next is Circle - the parent company of USDC coin - which holds US short-term debt, including repo contracts, with a total value of up to 29 billion USD.

Quoting data from the US Department of Finance, the country's accumulated public debt is increasing at a dizzying pace. The amount of money the federal government borrows to cover operating costs surpassed the $34 trillion mark earlier this year.

To make it easier to imagine, the Washington government is paying interest of 2 million USD every minute for its "debt bomb". Yesterday, the Congressional Budget Office said the national debt could approach 50,000 billion USD by 2034, equivalent to 122% of annual economic output.

Some experts call America's debt record a "sad achievement." Although the level of public debt is at a dangerous level for both the economy and national security, the US government cannot stop borrowing. Heightened debt has prompted the US Treasury to step up bond offerings from 2023.

The IMF is also concerned that debt and high interest rates of the "leading" country will skyrocket borrowing costs, causing global financial instability. On the contrary, some experts in the cryptocurrency sector say that this story could promote wider acceptance of other alternative assets such as Bitcoin and gold. In a recent comment, Circle CEO predicted stablecoins will account for up to 10% of global currencies in the next decade.

Coincidentally, among the many cryptocurrency bills in the United States, stablecoins are one of the most discussed topics. However, the stablecoin bill has not yet found a way out, hopefully the United States will officially pass it before this year's election.

In April, House Financial Services Committee Chairman Patrick McHenry was optimistic that the United States would have stablecoin legislation by the end of the year. McHenry is confident that “we are very close to this, we just need the legislative calendar to get things done in the Senate.”

He also echoed Republican Tom Emmer's view that a lame duck session could be the right time to attach legislation to a must-pass bill. A lame duck session occurs whenever a session of Congress meets after successors have been elected, but before the new term begins, w