Brian Moynihan, the chief executive officer of $2.6 trillion (assets) Bank of America, doesn’t usually make headlines for his crypto opinions. But in February, he did just that: “If they make that legal, we’ll go into that business.” He was talking about stablecoins—blockchain-based tokens typically pegged to the U.S. dollar and, increasingly, the plumbing of global payments. “They” are Congress, which is now racing to lay down the rules of the road for these crypto creations.

The STABLE Act in the House and the GENIUS Act in the Senate are dueling bills with a common goal: to bring stablecoin issuers into the regulatory fold, spelling out exactly how much capital, liquidity and risk management is enough. They also aim to clarify which federal or state agencies get to play referee. But there’s another, less flashy subplot: how will widespread acceptance of stablecoins among traditional institutions globally affect the $28 trillion United States Treasury market?

Here’s the thing: Treasurys are the backbone of stablecoin reserves because not much else comes close in terms of safety and liquidity. If you’re offering a digital dollar, you need to back it with assets that are as close to risk-free as possible. This sounds a lot like hundreds of money market mutual funds, which are issued by giants like BlackRock, Fidelity and Vanguard and hold over $6 trillion in assets, mostly in U.S. Treasury bills. The big difference is that unlike a money market fund, say, from Fidelity, which might pay you an annual yield of 4%, most stablecoin issuers have so far resisted offering any kind of yield or income to their holders. That’s one reason why Tether, the largest of them, has extremely high margins and reported over $1 billion in operating profit in the first quarter of 2025.

Right now, the dozens of stablecoin issuers that exist—though mostly Tether, based in El Salvador, and Circle, headquartered in New York—hold an estimated $150 billion in U.S. government debt, primarily short-term T-bills. That’s a rounding error in the $28 trillion Treasury securities market and a fairly insignificant portion of the $6 trillion in Treasury bills outstanding. Most Treasurys are still held by the U.S. government itself, think Social Security and federal pension funds. U.S. mutual funds, banks and insurance companies are the next biggest holders, with foreign investors accounting for about 30% (roughly $8.8 trillion), led by Japan and China.

But Britain’s Standard Chartered Bank, an $874 billion (assets) institution that offers custody for cryptocurrencies, projects that the global stablecoin market could jump from $240 billion to $2 trillion in just three years. Both current drafts of the stablecoin bills explicitly identify Treasury securities with maturities of 93 days or less as one of the few acceptable reserves. That could mean an extra $1 trillion in demand for T-bills in the near term, according........

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