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<p>The post <a href="https://coinpedia.org/news/are-stablecoins-saving-the-u-s-treasury-market/">US Bonds Lose Appeal as Stablecoins Gain Traction in Treasury Market</a> appeared first on <a href="https://coinpedia.org">Coinpedia Fintech News</a></p> 
<p>In the world of finance, a significant change is afoot as US bonds, once seen as rock-solid, face a tough time. Take the iShares 20 Plus Year Treasury Bond ETF ($TLT), for example, showing a 22% dip in the last five years and a whopping 50% drop since 2020. This shift prompts crucial questions about the reliability and future of our usual safe-haven assets.</p> 
<h2 class="wp-block-heading" id="h-what-s-going-on-in-the-market"><strong>What’s Going On</strong> in the Market?</h2> 
<p>Behind the scenes, there’s a classic economic struggle in the US Treasury market—too much supply, not enough demand. According to Liz Hoffman from Semafor, US Treasury bonds are going through their toughest time since the Civil War. To make things trickier, the government is borrowing more to cover deficits, and traditional buyers are stepping back. </p> 
<p>The result? People are asking for higher returns, and bond auctions aren’t doing so well, leading to big losses for bond portfolios.</p> 
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   <p lang="en" dir="ltr">Are Stablecoins Saving The Treasury Market?<br><br>US bonds have historically been seen as a safe haven asset, but in a time when investors were seeking safety, bonds have failed them.<br><br>For example, the iShares 20 Plus Year Treasury Bond ETF ($TLT) is down 22% over the last 5 years and… <a href="https://t.co/16nvt4Q7d5">pic.twitter.com/16nvt4Q7d5</a></p>— Pomp 
   <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f32a.png" alt="🌪" class="wp-smiley" style="height: 1em; max-height: 1em;"> (@APompliano) <a href="https://twitter.com/APompliano/status/1730742356922527903?ref_src=twsrc%5Etfw">December 2, 2023</a>
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<h2 class="wp-block-heading" id="h-global-changes-less-china-and-japan-more-digital-players"><strong>Global Changes: Less China and Japan, More Digital Players</strong></h2> 
<p>Traditionally, countries like China and Japan have been steadfast investors in US Treasuries. However, over the past decade, their combined holdings have plummeted by about 68%. This retreat is part of a broader global realignment, where traditional nation-state investors are scaling back their investments in US government bonds.</p> 
<p><img decoding="async" width="624" height="421" src="https://lh7-us.googleusercontent.com/Wnd2mRBo9nQotfpdZfoFSN7MR2ze3YB1e1GB2klbkZdIP1yok1pibmTpJ8FdZKRd3qFq3GIMr1CxrVhDjPvD2K__dyvOsCZaK_QmWn0ddZavT0w72ffBz0W5KwGfIWC4s_RH5PVO9ACqRH8TWc6g7CREACJrEH_2-1iG0p8Ad1uA8aPg969JFByFyvjHGw"></p> 
<p>In a world where traditional investments are slowing down, a new star has entered the scene: stablecoin issuers. These digital entities have quickly become the 16th largest group of investors in US Treasuries, even outpacing some big countries. It’s a signal of a shift towards digital fiat currencies in the Treasury market.</p> 
<h2 class="wp-block-heading" id="h-a-peek-into-the-future-the-new-normal"><strong>A Peek into the Future</strong>: The New Normal</h2> 
<p>Despite the shift, Japan and China remain the largest holders of US Treasuries. However, the trend points towards a future increasingly influenced by fiat stablecoin issuers. This trend indicates a potential digital disruption in the Treasury market.</p> 
<p>The rise of stablecoin issuers in the Treasury market might be surprising now, but it’s just another sign of how quickly things change in finance. This trend could lead stablecoin issuers to become the top holders of US Treasuries in the next decade—something that seemed unlikely just a few years ago. As finance keeps evolving, the role of digital assets in the traditional game is getting more crucial, promising to reshape the Treasury landscape in ways we’re yet to fully understand.</p>

US Bonds Lose Appeal as Stablecoins Gain Traction in Treasury Market

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