The post U.S. Treasury Report Proposes CBDC Replacement for Private Stablecoins appeared on BitcoinEthereumNews.com.

TLDR U.S. Treasury released report suggesting stablecoins should be replaced by CBDCs Treasury estimates $120B in T-bills bought by stablecoin issuers, with Tether holding $81B Report warns of potential “fire-sale” risk if major stablecoins collapse Over 80% of crypto transactions involve stablecoins, with USDT leading in trading volume Trump opposes CBDCs but his project World Liberty Financial plans to launch a stablecoin The U.S. Treasury Department has called for the eventual replacement of private stablecoins with government-issued central bank digital currency (CBDC) in a detailed report released Wednesday. The report highlights mounting concerns over the stablecoin market’s growing influence in the U.S. Treasury bills market. According to the Treasury’s Office of Debt Management, stablecoin issuers now hold approximately $120 billion worth of Treasury bills as collateral. Tether, the company behind the USDT stablecoin, accounts for $81 billion of these holdings, making it a major player in the T-bills market. The 132-page report draws parallels between the current stablecoin landscape and the “wildcat” banking era of the 1800s, when private banks issued their own currencies. The Treasury suggests that just as government-backed money replaced those private currencies, CBDCs should take over the role currently played by stablecoins in digital transactions. Stablecoins have become essential to cryptocurrency markets, serving as a bridge between traditional and digital finance. The Treasury estimates that these digital assets are involved in more than 80% of all crypto transactions. USDT, the largest stablecoin by market volume, processed $53 billion in trades within a 24-hour period. The report expresses particular concern about the risk of stablecoin depegging events, where these digital currencies lose their intended one-to-one relationship with the U.S. dollar. Several such incidents have occurred in recent years, raising alarm bells about market stability. The Treasury’s primary worry centers on the possibility of a “fire-sale” scenario. If…

---

Filed under: News - @ October 31, 2024 1:20 pm