Stablecoin Issuers’ Income to Fall by $1.56 Billion by Year-End
The U.S. Federal Reserve’s decision to cut interest rates could negatively impact revenues of the largest centralized stablecoin issuers, which hold approximately $125 billion in U.S. Treasuries as collateral for their assets.
According to a recent CCData report, 80.2% of the assets backing the five largest centralized stablecoins are U.S. Treasuries. Their profitability is directly dependent on that of government bonds, which fell after the Fed’s decision to cut interest rates.
The total amount of stablecoin issuers’ reserves in U.S. Treasuries is $125 billion:
- Tether (USDT) holds $93.2 billion;
- USD Coin (USDC) holds $28.7 billion;
- First Digital USD (FDUSD) holds $1.83 billion;
- PayPal USD (PYUSD) holds $634 million;
- TrueUSD (TUSD) holds $502 million.
CCData analysts estimate that the issuers’ revenues would decline by approximately $625 million if interest rates fell by 50 bps. According to data from the FedWatc service, the federal funds rate is expected to fall 75 bps by the end of 2024, 50 bps in November, and 25 bps in December. Thus, by the end of the year, the issuers of the five largest stablecoins may see a revenue shortfall of about $1.56 billion.
In mid-2024, the stablecoin market capitalization reached $164 billion. In September, this metric rose to $172 billion. The main catalyst for its development was the growing interest in assets beyond the crypto markets.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
MARA's stock jumps after raising $1 billion via convertible notes to buy more bitcoin
MARA Holdings announced the successful closing of its $1 billion offering of 0% convertible senior notes due 2030.The bitcoin miner plans to allocate around $199 million of the proceeds to repurchase $212 million in principal of its existing convertible notes due 2026. The remaining funds will be used to acquire more bitcoin.
Gold loses luster as institutional demand fuels bitcoin price surge, analysts say
Bitcoin’s 46% surge over the past month, contrasted with gold’s 3% decline, highlights a shifting investor preference toward alternative store-of-value assets, analysts say.Derivatives traders are buying up bitcoin call options ahead of Trump’s inauguration, signaling strong bullish sentiment for the beginning of 2024.
SEC is 'engaging' Solana ETF applicants: report
SEC “engaging” on Solana ETF applications, sparking optimism for potential approval in 2025.VanEck, 21Shares, and Bitwise lead Solana ETF filings amid pro-crypto White House hopes.SOL token rises 4.6% to $247.91, bolstered by Solana’s strong DeFi ecosystem and demand.
Shiba Inu Developer Says SHIB Is No Longer a Memcoin