Stable coin emitters keep short-term US state bonds worth $ 80 billion

StableCoin emitters such as Tether and Circle now keep short-term US state bonds worth 80 billion USD, which underlines the growing role of actors in the field of digital assets on the traditional financial markets.

According to the JPMorgan examinations, Tether and his competitors accounted for 2 percent of the treasure change market in May - debt titles, which are usually used as a means of payment in corporate balance sheets, more than the proportion of Warren Buffett's investment Gigant Berkshire Hathaway. JPmorgan said that the newer issuers had "considerable room for growth if stable coins should become a form of digital means of payment".

The increasing importance of stable coin issuers in a market that was historically dominated by less risky investors is one of the factors that the global financial supervisory authorities cause to reinforce their examination of the broader crypto industry.

stable coins are cryptocurrencies that act as a bridge between the crypto and traditional markets and make dealers faster and easier to buy and sell digital tokens. They are usually linked to the largest and most stable currencies in the world. According to the price tracking page Coingecko, the three largest stable coins after market capitalization, Tether, Circle’s USDC and Binance’s Busd have a combined market capitalization of around $ 140 billion. As a rule, these are said to be backed up at any time by reserves of high-liquid mainstream financial systems.

But in May this backstop was questioned when Tether's US dollar binding briefly broke under penalty sales pressure-a slip that followed shortly after a smaller stable coin, terrausd.

Janet Yellen, US finance minister, said that the collapse of Terrausd was an event that "simply illustrates that this is a rapidly growing product and that there is rapidly growing risks".

The regulatory authorities have special concerns about the quality of the assets that StableCoin operators according to their own statements. Terra was an algorithmic stable coin that did not have a reserve portfolio and was based on computers and financial incentives to pursue the value of $ 1.

The proposed responsible Financial Innovation Act, which was supported by the Senator Cynthia Lummis and Kirsten Gillibrand, has also requested requirements for the disclosure of reserves for stable coin issuers.

In response to this, Tether and Circle, who together make up around four fifths of all stable coin emissions, agreed to buy their dependence on short-term corporate debts, which are known as a commercial paper, to reduce and change the US treasure change that are considered to be Ultra with little risk. The operators have also promised to improve their transparency.

The Tether's market dominance has shrunk from more than $ 80 billion in May to less than $ 70 billion. But USDC - the stable coin, which is produced by Tether's main competitor Circle - was more stable at around $ 53 billion.

"We believe that one of the main reasons for the dramatic shift was the superior transparency and wealth quality of the USD Coin’s currency reserves," said JPMorgan.