The expansion prospects of stablecoins are in doubt, and Wall Street believes it is unlikely to change the demand pattern for US Treasury bonds.

According to Bloomberg, after the United States passed its first stablecoin legislation—the GENIUS Act—there is clear division on Wall Street over whether stablecoins can truly boost demand for the US dollar and bring new buyers to short-term US Treasuries. Strategists at institutions such as JPMorgan, Deutsche Bank, and Goldman Sachs generally believe that it is still too early to view this as a “structural change.” Analysts point out that stablecoin funding mainly comes from money market funds, bank deposits, cash, and offshore dollars. Under the GENIUS Act, stablecoins are prohibited from paying interest, so yield-sensitive funds lack motivation to move out of savings accounts and money market funds. As a result, even if stablecoins expand, their net demand for Treasuries may mainly reflect a shift in holder structure rather than new demand. Additionally, if stablecoin-related dollars are considered Federal Reserve liabilities, the Fed may correspondingly reduce its holdings of Treasury assets, thereby offsetting some of the incremental demand brought by stablecoins. Against the backdrop of federal debt already exceeding $30 trillion and projected to increase by another $22 trillion over the next decade, stablecoins are unlikely to fundamentally alleviate the United States’ debt and deficit pressures.