Stablecoin adoption continues to accelerate, and according to Messari\u2019s \u201cState of Stablecoins\u201d report, stablecoin capital flows are directly impacting the $28 trillion<\/a> U.S. Treasury market.<\/p>\n According to the report<\/a>, which cites data and research from the Bank of International Settlements, \u201ca multi-billion dollar weekly inflow into stablecoins is linked with a ~2.5 bp [basis point] drop in 3-month Treasury bill yields after 10 days, and upwards of ~5 bps reduction after 20 days.\u201d<\/p>\n It goes on to say that this knock-on effect from stablecoin popularity is \u201ccomparable to that of small-scale quantitative easing on long-term yields.\u201d The correlation works both ways, with large outflows reportedly having an even greater impact on Treasury yields, raising yields by 6 to 8 bps over a ten-day period.<\/p>\n Stablecoin growth has been a key theme of this market cycle, with the sector\u2019s total market capitalization increasing by 101%<\/a> to $262 billion from $130 billion at the beginning of 2024. This represents an increase of more than 800% since the beginning of 2021.<\/p>\n Investor demand for exposure to stablecoin companies was showcased by the success<\/a> of the Circle IPO earlier this year. Circle\u2019s CRCL stock went public at between $27-$31 per share, and increased tenfold<\/a> in a matter of weeks, reaching a high of $299 on June 24. CRCL currently trades at $198 per share, a 538% increase from the high end of its IPO price range.<\/p>\n Additionally, the new stablecoin-focused Bitcoin sidechain, Plasma, raised $1 billion<\/a> in capital nearly instantly during its ICO. The Plasma ICO is ongoing<\/a>, and users have earned allocations to the ICO by staking USDT in Plasma\u2019s vaults, which will serve as the chain\u2019s initial total value locked (TVL). <\/p>\n The real-world asset (RWA) sector is accelerating even faster than traditional stablecoins, with a total on-chain RWA market capitalization of $24.8 billion, up 181% from $8.6 billion at the beginning of 2024.<\/p>\n Tokenized U.S. Treasuries are one of the RWA market\u2019s largest subsectors, commanding a $6.77 billion market capitalization, or 27% of the total RWA space.<\/p>\n The onchain Treasury trend has been fueled by demand for yield-bearing stablecoins, where holders accrue yield from the Treasury bills that serve as the stablecoins\u2019 backing. The choice to deploy stablecoin reserves in Treasury bills is one of the main drivers of the correlation between stablecoin flows and Treasury bill yields.<\/p>\n Stellar Network, which launched the first onchain money market fund in the form of Franklin Templeton’s FOBXX fund in 2021, is one ecosystem that is leaning into yield-bearing stablecoin usage on its network. According to the report, the yield-bearing stablecoin market capitalization on Stellar has increased by roughly 33% since the beginning of 2024, reaching almost $450 million.<\/p>\n Messari says that issuers such as Franklin Templeton stand to save substantially on their costs due to tokenization and that the firm \u201cis able to cut its record-keeping costs for every 50,000 transactions from $50,000 to $120.\u201d<\/p>\nTokenized Treasuries and Yield-Bearing Stablecoins<\/h2>\n
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