Kansas City Fed: Bank Deposits Moving to Stablecoins Might Boost Treasury Demand 🔥

Stablecoins barely touch Treasury markets now. But just wait. 🚀

A new Kansas City Federal Reserve report shows stablecoin issuers sitting on roughly $125 billion in Treasury bills. Small potatoes. Less than 2% of all Treasury securities out there. Insurance companies? They’ve got five times that amount. And mutual funds? A whopping $4.5 trillion – 36 times more than what stablecoins hold.

Yet things might change. Fast.

Stefan Jacewitz, an economist at the Kansas City Fed, sees something brewing. The stablecoin market seems poised for explosive growth in the years ahead. Not entirely clear how big it’ll get. This shift could redirect money flows in unexpected ways. More demand for Treasury securities. Fewer loans elsewhere. Kind of surprising how this might reshape financial plumbing 📈

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