As stablecoins continue to regain investors’ trust, the blockchain companies issuing these digital currencies are making conscience efforts to keep cryptocurrencies at a stable price.
One way they achieve this is by backing the stablecoin with financial instruments like the United States treasuries, helping to bolster the currency’s balance sheet. A recently shared chart reveals that stablecoins now hold the 16th largest position among the top 24 holders of U.S. treasuries.
Source: The Block
As shown in the chart above, the stablecoin market’s ranking puts it ahead of six sovereign holders – Norway, South Korea, Saudi Arabia, Germany, the Netherlands, Bermuda, Mexico, and the United Arab Emirates.
Stablecoins Hold 16th Largest Position
The chart also shows that the stablecoin market accounts for over $100 billion worth of U.S. treasuries, as of June 2023. In previous reports, stablecoin issuers disclosed the amounts they have invested in the treasury securities.
For example, MakerDAO, the firm behind the DAI stablecoin, noted in October 2022 its plan to invest $500 million in U.S. treasuries and corporate bonds. Tether, the blockchain firm behind the leading stablecoin USDT, disclosed in its quarterly attestation report that it held around $72.5 billion used to back its flagship stablecoin.
Meanwhile, countries like Japan, China, and the United Kingdom continue to hold the top three positions of U.S. treasuries holders, respectively.
Stablecoin Market Rekindle Users’ Trust
Last year, a series of infamous events occurred that sunk investors’ trust in stablecoins. Prominent among them is the dramatic crash of UST, a so-called algorithmic stablecoin deployed on the Terra blockchain.
Losing its peg to the U.S. dollar, the stablecoin’s downfall triggered a chain of events that plunged the crypto market into a wave of bearish trends. Regulators across several countries employed stricter measures to tighten stablecoin adoption in their respective regions.
However, as the months went by, users began to flock to stablecoins and other crypto assets once again. This was especially so at a time when commercial banks crashed and investors sought a haven from the banks’ failure.
