Bonds 06 (Oct 23 - Dec 26)

[behappyalways]

*JAPAN 30-YEAR BOND SALE DRAWS WEAKEST DEMAND RATIO SINCE 2023
https://x.com/zerohedge/status/1930468731873873958

[winston]

Stablecoins' step toward mainstream could shake up parts of US Treasury market

Congress is poised to pass legislation establishing a regulatory framework for stablecoins, expected to help legitimize the dollar-pegged cryptocurrencies which are commonly used by crypto traders to move funds between tokens.

Proponents of the bill argue that clear rules will spur further stablecoin activity, and support a growing sector of buyers of short-term US government debt, or T-bills, that are typically considered cash-equivalent securities.

But others worry a larger footprint for a relatively new and more volatile industry could in turn spur volatility in the bills market.

In the event of a sudden loss of confidence, regulatory pressure, or market rumors, this could trigger large-scale liquidations, potentially depressing Treasury prices and disrupting fixed-income markets.

A problem in the stablecoin sector could spill over into broader financial markets, affecting institutions holding similar assets or (that) rely on stablecoin liquidity.

If signed into law, the stablecoin bill would require tokens to be backed by liquid assets - like US dollars and short-term Treasury bills - and monthly disclosures from issuers on the composition of their reserves. That means if stablecoins are expected to grow, issuers will have to purchase more T-bills to back their assets.

Tether and Circle, the latter of which debuted on the NYSE on Thursday, together hold US$166 billion (HK$1.29 trillion) in US Treasuries,

The stablecoin market, currently about US$247 billion, could grow to US$2 trillion by 2028.

Currently, there are about US$29 trillion in Treasury securities outstanding, of which US$6 trillion are bills.

JP Morgan analysts estimated that stablecoin issuers could become the third-largest buyer of Treasury bills in the coming years.

Growth of the stablecoin market at the expense of bank deposits could reduce banks’ demand for US Treasuries, as well as have an impact on credit growth.

Source: The Standard

https://www.thestandard.com.hk/wealth-a ... le/304188/