The US Treasury Department argues that stablecoins should be replaced by CBDCs, and if Tether collapses, it will become a national debt disaster.

The U.S. Treasury Department's Office of Debt Management recommended in a report Wednesday that private issuance's dollar Stable Coin should be replaced by the Central Bank Digital Coin (CBDC) in case the bank run risk in the Stable Coin market could spread to broader financial markets and Treasury markets in the future. (Synopsis: USDT is essentially a US CBDC!) Glassnode analyst: The US government acquiesces in the existence of Tether) (Background supplement: Republican Party Platform 2024 supports Cryptocurrency: defend BTCMining, oppose CBDC, end Biden's suppression... Trump meme coin pulls up) The U.S. Treasury Department's Office of Debt Management highlighted the risk of Stable Coin buying too much U.S. Treasury bonds in a new report on Wednesday (30th) and suggested replacing Stable Coin by private issuance with a state-backed Central Bank digital coin (CBDC). According to Decrypt and Coindesk, the report focuses on concerns about the rapid growth of the Stable Coin market, that is, private Stable Coinissuance merchants such as Tether and Circle buy too much public bonds, and once the main Stable Coin faces depeg or even collapses, it will cause the US public debt to face large dumping. Similar to the replacement of the private bank issuance's "wildcat coupon" by the government-backed Central Bank coin in the late 1800s, the Central Bank digital coin (CBDC) may need to replace Stable Coin and become the main form of digital coin for support coin-based transactions. U.S. Treasury: Stable Coin Should Be Replaced by CBDC In this Treasury Debt Management Office report for the fourth quarter of fiscal year 2024, Stable Coin occupies a large portion of the page. The Treasury estimates that private Stable Coinissuance vendors have purchased $120 billion worth of T-bills as Collaterals for interest-bearing Stable Coins, most of which (nearly $81 billion) have been purchased by Tether, the largest Stable Coin USDT issuance merchant. The report states that more than 80% of cryptocurrency transactions involve Stable Coin, and Tether's USDT is undoubtedly the most widely traded cryptocurrency, generating $53 billion in volume in the last 24 hours alone. While many Stable Coin advocates believe that the dollar-backed Stable Coin supports the dollar's strength by increasing demand for Treasuries, the U.S. Treasury doesn't seem to believe it. The report focuses on the "common phenomenon" of Stable Coindepeg or complete collapse in recent years, which the Treasury believes could lead to disaster if Treasury bills become increasingly integrated with the Stable Coin industry. The collapse of major Stable Coins like Tether could cause their holdings of U.S. Treasuries to be "dumped." While Stable Coin currently represents a marginal segment of the Treasury Bill market, the Treasury Bill market may face greater risk of dumping due to the bank run of the Stable Coin market as Stable Coin continues to expand its holdings of public bonds. If history is any guide, Stable Coin will need to be regulated like narrow banks or coin market funds to prevent pressure from spreading to the broader financial markets and treasury markets. Read more: Stop the Fed from issuing CBDCs! The US House of Representatives passed the Central Bank Digital Coin Anti-Surveillance Act, fearing to shake the global status of the dollar? Read more: Trump campaign emphasizes "never issuanceCBDC": the government will steal your money! While raising concerns about Stable Coin, the report appreciates the significant potential of sub-coin of U.S. Treasuries and other real-world assets. According to the report, "Substitution has the potential to unlock the advantages of Programmability and interoperable ledgers, and brings the possibility of real-time and transparent settlement and settlement, which is expected to risk dropSettlement failure." However, the report recommends caution with regard to substitution, as even small incremental improvements can have a large-scale impact in a very large market like the Treasury market. According to the report, the substitution of short-term Treasuries could "disrupt the banking system" because it could compete with bank deposits. "Block chains controlled and licensed by private individuals should be developed, managed by one or more trusted private or government agencies." "The way forward should be a prudent approach led by a trusted central body with broad support from private sector actors," the report concludes. Related reports SWIFT accelerates embrace of Block chain: next year to carry out digital asset and coin trading experiments, assist CBDC cross-border transactions in various countries Yang Jinlong, president of Central Bank, explained the three goals of issuing "digital new Taiwan coin", emphasizing that CBDC will not eliminate cash Morgan Stanley: BTC, Stable Coin, CBDC have the potential to drive global "de-dollarization" What is Central Bank Digital Coin? The types, advantages, disadvantages and risks of CBDCs, the development status and regulations of various countries [the US Treasury Department advocates: Stable Coin should be replaced by CBDCs, and Tether will become a national debt disaster if it collapses] This article was first published in BlockTempo "Dynamic Trends in Dynamic Areas - The Most Influential Block Chain News Media".