The post Stablecoins Could Hit $1.2 Trillion and Shake U.S. Debt appeared on BitcoinEthereumNews.com. Fintech Stablecoins may soon reshape not only crypto markets but also U.S. government debt markets, according to a new Coinbase research report published on Aug. 21. The exchange projects that the stablecoin sector could balloon from its current $270 billion size to as much as $1.2 trillion by 2028, nearly a fivefold increase. Billions Flowing Into Treasuries Each Week Because most stablecoins are backed by U.S. dollars and short-term government securities, rapid growth would have real implications for the Treasury market. Coinbase analysts estimated that issuers like Circle and Tether could eventually be buying $5.3 billion worth of Treasury bills every week just to maintain reserves. Even small moves in this space matter. Such steady demand could shave two to four basis points off yields on three-month Treasuries, a seemingly minor shift with significant consequences across the $6 trillion money market, which sets borrowing costs for banks, corporations, and governments. But Coinbase also warned the flow of funds may not always be one-way. A sudden wave of redemptions — for example, a $3.5 billion outflow in a single week — could trigger large Treasury sales, potentially straining short-term liquidity. Regulation Could Shape the Market’s Next Phase The report pointed to the recently passed GENIUS Act, set to take effect in 2027, as a key turning point. The law requires stablecoin issuers to hold full reserves, undergo independent audits, and provide bankruptcy protections for token holders. While the rules stop short of giving issuers access to Federal Reserve liquidity, Coinbase argued the framework should make runs less likely and attract more institutional participants. Clearer regulations, the report said, could pave the way for mainstream financial institutions to embrace stablecoins not just as trading tools but as settlement infrastructure and payment rails. Beyond Crypto Trading Once seen as primarily a bridge currency… The post Stablecoins Could Hit $1.2 Trillion and Shake U.S. Debt appeared on BitcoinEthereumNews.com. Fintech Stablecoins may soon reshape not only crypto markets but also U.S. government debt markets, according to a new Coinbase research report published on Aug. 21. The exchange projects that the stablecoin sector could balloon from its current $270 billion size to as much as $1.2 trillion by 2028, nearly a fivefold increase. Billions Flowing Into Treasuries Each Week Because most stablecoins are backed by U.S. dollars and short-term government securities, rapid growth would have real implications for the Treasury market. Coinbase analysts estimated that issuers like Circle and Tether could eventually be buying $5.3 billion worth of Treasury bills every week just to maintain reserves. Even small moves in this space matter. Such steady demand could shave two to four basis points off yields on three-month Treasuries, a seemingly minor shift with significant consequences across the $6 trillion money market, which sets borrowing costs for banks, corporations, and governments. But Coinbase also warned the flow of funds may not always be one-way. A sudden wave of redemptions — for example, a $3.5 billion outflow in a single week — could trigger large Treasury sales, potentially straining short-term liquidity. Regulation Could Shape the Market’s Next Phase The report pointed to the recently passed GENIUS Act, set to take effect in 2027, as a key turning point. The law requires stablecoin issuers to hold full reserves, undergo independent audits, and provide bankruptcy protections for token holders. While the rules stop short of giving issuers access to Federal Reserve liquidity, Coinbase argued the framework should make runs less likely and attract more institutional participants. Clearer regulations, the report said, could pave the way for mainstream financial institutions to embrace stablecoins not just as trading tools but as settlement infrastructure and payment rails. Beyond Crypto Trading Once seen as primarily a bridge currency…

                                                                               Market participants are eagerly anticipating at least a 25 basis point (BPS) interest rate cut from the Federal Reserve on Wednesday.                     The Federal Reserve, the central bank of the United States, is expected to begin slashing interest rates on Wednesday, with analysts expecting a 25 basis point (BPS) cut and a boost to risk asset prices in the long term.Crypto prices are strongly correlated with liquidity cycles, Coin Bureau founder and market analyst Nic Puckrin said. However, while lower interest rates tend to raise asset prices long-term, Puckrin warned of a short-term price correction.  “The main risk is that the move is already priced in, Puckrin said, adding, “hope is high and there’s a big chance of a ‘sell the news’ pullback. When that happens, speculative corners, memecoins in particular, are most vulnerable.”Read more