The post Are Stablecoins (USDC, USDT) an ‘Engine of Global Dollar Demand’ or a 2008-Style ‘Liquidity Crunch’? appeared on BitcoinEthereumNews.com.

Good Morning, Asia. Here’s what’s making news in the markets: Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk’s Crypto Daybook Americas. While traders fixated on Jerome Powell’s latest rate signals, the more consequential story may be playing out in stablecoins. The sector has nearly doubled in a year to $280 billion, with most issuers holding short-term Treasuries as collateral. That ties crypto liquidity more directly to Federal Reserve policy than ever before, according to OKX Singapore CEO Gracie Lin. (DeFiLlama) “While markets are still digesting Powell’s latest comments on rates, a more consequential long-term shift is happening beyond the charts and headlines. It’s in the so-called ‘boring’ stablecoins that we’re seeing better long-term price signals,” Lin told CoinDesk in a note. “The next step is unification – stablecoins have built the rails, now they need a unified market that delivers liquidity, efficiency and true utility for investors,” Lin continued. Coinbase analysts project the market could swell to $1.2 trillion by 2028, forcing $5.3 billion of new Treasury purchases each week. The inflows may marginally lower yields, but the risk runs in reverse: redemption surges could trigger forced selling of bills, draining liquidity. The debate continued in a recent episode of Goldman Sachs’ Exchanges podcast, where UC Berkeley’s Barry Eichengreen warned that stablecoins could replicate the money-market fund panic of 2008. “When a dollar money market share fell to 97 cents in 2008, chaos broke out, contagion fears spread, and the government stepped in to guarantee funds,” he said. Former U.S. Comptroller of the Currency Brian Brooks countered on the podcast that the new GENIUS Act, which requires one-to-one Treasury backing, mirrors the national banking reforms that ended…

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Filed under: News - @ September 3, 2025 11:29 am