1 hour ago
Treasury Secretary Scott Bessent’s endorsement of dollar-pegged stablecoins creates a pathway for up to $34 trillion to travel into decentralized concern protocols specified arsenic Ethena, Ether.fi, and Hyperliquid.
Arthur Hayes reported successful his Aug. 27 blog post that Bessent aims to redirect superior from the $13 trillion Eurodollar strategy and $21 trillion successful Global South retail deposits into stablecoin infrastructure that purchases Treasury bills.
Yet, helium said that this strategy addresses 2 problems: the Treasury’s inability to way Eurodollar flows and the request for price-insensitive buyers of authorities debt.
The program leverages US societal media platforms arsenic organisation channels for stablecoin adoption. Meta’s WhatsApp could deploy crypto wallets to billions of users worldwide, enabling seamless transactions with stablecoins portion bypassing section banking systems.
DeFi protocols positioned for “secular rise”
Stablecoin issuers indispensable put deposits successful Treasury bills to support dollar parity, creating guaranteed request for authorities debt.
Tether earns a nett involvement borderline of 4.25% to 4.5% by holding T-bills, portion paying nary involvement connected USDT tokens. This concern exemplary scales straight with deposit growth, providing Bessent with price-insensitive buyers for short-term authorities securities.
Bessent tin weaponize dollar dominance to unit compliance with the adoption of stablecoins.
One illustration mentioned by Hayes is threatening to exclude overseas banks from Federal Reserve swap lines during fiscal crises. This determination would propulsion Eurodollar deposits toward US-regulated stablecoin platforms.
In the case, Hayes projects a full stablecoin circulation of $10 trillion by 2028. In this scenario, helium argued that 3 protocols are poised for a “secular rise.”
The archetypal is Ethena, which operates the synthetic dollar strategy USDe to make yields by shorting crypto derivatives against agelong positions. As of property time, Ethena had $12.4 cardinal successful full worth locked (TVL) successful the protocol.
Road to 25% marketplace share
The investigation forecasts that USDe could execute a 25% marketplace stock of full stablecoins, perchance reaching a proviso of $2.5 trillion.
Hayes besides mentioned Ether.fi. The protocol offers stablecoin spending done Visa-powered debit cards, allowing users to walk their crypto anyplace Visa is accepted.
The level earns gross astatine a ratio comparable to JPMorgan’s 1.78% fee-to-deposit ratio and tin besides seizure decent worth successful the enlargement of the US dollar-pegged stablecoin market.
The 3rd protocol mentioned successful the station is Hyperliquid. The protocol dominates decentralized perpetual trading, with a 63% marketplace share.
In addition, Hayes cited that Hyperliquid processes regular measurement representing 26.4% of the full stablecoin supply successful trading activity.
Considering his $10 trillion prediction, the mode these 3 protocols interact with stablecoins could heavy payment them and their autochthonal tokens.
The station Treasury Secretary Bessent’s stablecoin propulsion could thrust $34 trillion into Ethena, Etherfi, Hyperliquid appeared archetypal connected CryptoSlate.
English (US) 