{"id":8724,"date":"2025-12-18T17:12:09","date_gmt":"2025-12-18T16:12:09","guid":{"rendered":"https:\/\/joapen.com\/blog\/?p=8724"},"modified":"2025-12-18T17:12:12","modified_gmt":"2025-12-18T16:12:12","slug":"stablecoins-as-tokenized-versions-of-u-s-debt","status":"publish","type":"post","link":"https:\/\/joapen.com\/blog\/2025\/12\/18\/stablecoins-as-tokenized-versions-of-u-s-debt\/","title":{"rendered":"Stablecoins as tokenized versions of U.S. debt"},"content":{"rendered":"\n

I have been reading more about stablecoins and what are the mechanisms behind the scene.<\/p>\n\n\n\n

In this previous map <\/a>I asked my question: what do these companies do with all these US dollars they have in custody?<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The answer before July 2025 was: where they obtain more benefits keeping the risk of lack of liquidity under control.<\/p>\n\n\n\n

But this changed in July 2025 with the US passed the Genius Act<\/strong>, which legally mandates that “payment stablecoins” must be backed 1:1 by highly liquid assets. This includes cash and Treasuries with maturities of 90 days or less<\/span><\/strong>.<\/p>\n\n\n\n

At this moment, the end of 2025, Stablecoin issuers collectively hold hundreds of billions of dollars in U.S. Treasuries and it’s increasing as new players (for instance Visa<\/a>) are adding their services to the party , placing them among the top 15-20 holders of U.S. debt globally\u2014surpassing many sovereign nations.<\/p>\n\n\n\n

When the U.S. government pays interest on its bonds (e.g., 4\u20135%), that interest usually goes to the Stablecoin issuer<\/strong> (for instance Circle), not the token holder.<\/p>\n\n\n\n

Any interest payment has a linked risk. The link between the Stablecoin and the U.S. Bonds creates a “feedback loop” that probably concerns the Fed:<\/p>\n\n\n\n

    \n
  1. The Run:<\/strong> If people lose confidence in a Stablecoin, they rush to redeem it for cash.<\/li>\n\n\n\n
  2. The Fire Sale:<\/strong> The issuer must suddenly sell billions of dollars in U.S. Bonds to meet those redemptions.<\/li>\n\n\n\n
  3. Market Stress:<\/strong> If the sale is large enough (e.g., $50B+ in a day), it can cause the price of U.S. Bonds to drop and interest rates to spike, affecting the broader U.S. economy.<\/li>\n<\/ol>\n\n\n\n

    There are many ways to access to these U.S. bonds, the easy way is through an ETF.<\/p>\n\n\n\n

    Ticker<\/strong><\/td>Fund Name<\/strong><\/td>Focus Maturity<\/strong><\/td><\/tr><\/thead>
    SGOV<\/strong><\/td>iShares 0-3 Month Treasury Bond ETF<\/td>0\u201390 Days<\/td><\/tr>
    BIL<\/strong><\/td>SPDR Bloomberg 1-3 Month T-Bill ETF<\/td>30\u201390 Days<\/td><\/tr>
    TBLL<\/strong><\/td>Invesco Short Term Treasury ETF<\/td>0\u201312 Months (Heavy 0-3m weight)<\/td><\/tr>
    CLTL<\/strong><\/td>Invesco Treasury Collateral ETF<\/td>Ultra-short (0\u201312 Months)<\/td><\/tr>
    USFR<\/strong><\/td>WisdomTree Floating Rate Treasury Fund<\/td>Floating rate (Reset weekly\/monthly)<\/td><\/tr>
    TFLO<\/strong><\/td>iShares Floating Rate Treasury Bond ETF<\/td>Floating rate (Reset weekly\/monthly)<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    Today (18\/Dec), the table of interest is as follows:<\/p>\n\n\n\n

    Maturity<\/strong><\/td>Yield (Annualized)<\/strong><\/td><\/tr><\/thead>
    4-Week (1-Month)<\/strong><\/td>3.76%<\/td><\/tr>
    13-Week (3-Month)<\/strong><\/td>3.64%<\/strong><\/td><\/tr>
    26-Week (6-Month)<\/strong><\/td>3.60%<\/td><\/tr>
    52-Week (1-Year)<\/strong><\/td>3.51%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    I updated the Wardley Map with that new component that is much relevant.<\/p>\n\n\n\n

    \"\"<\/figure>\n\n\n\n

    <\/p>\n","protected":false},"excerpt":{"rendered":"

    I have been reading more about stablecoins and what are the mechanisms behind the scene. In this previous map I asked my question: what do these companies do with all these US dollars they have in custody? The answer before July 2025 was: where they obtain more benefits keeping the risk of lack of liquidity … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[157,35,204],"tags":[],"class_list":["post-8724","post","type-post","status-publish","format-standard","hentry","category-cryptocurrency","category-finance","category-wardley-maps"],"yoast_head":"\nStablecoins as tokenized versions of U.S. debt -<\/title>\n<meta name=\"description\" content=\"I have been reading more about stablecoins and what are the mechanisms behind the scene. 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