Analysis: Stablecoins could become a new tool for U.S. Treasury Secretary Vincent to make up for the deficit

Following the passage of the GENIUS bill in the US Senate this week, stablecoins have the potential to become an important source of funding for the US government and could even become a new vehicle for US Treasury Secretary Vincent Bescent to cover the country's deficit. Bescent previously praised the GENIUS bill and said a regulated and growing stablecoin market could create new buyers for US government debt, driving private sector demand for US Treasuries. Bescent previously told the US House Financial Services Committee in May that there was speculation that the stablecoin market could demand as much as $2 trillion for US government securities in the coming years.
However, the analysis believes that the stablecoin industry is unlikely to fully solve the US government's debt financing problem, and may pose additional risks, because the additional demand for stablecoins takes time to develop, and the US Treasury has to issue a large number of debt securities within a year. If there are problems that prevent the Federal Reserve from cutting interest rates, the US deficit will get out of control.