According to PANews, the Federal Reserve's first interest rate cut since March 2020 is expected to affect the revenue streams of the five major centralized stablecoins. According to the CCData report, these stablecoins hold nearly $125 billion in U.S. Treasuries and could lose about $625 million in interest income for every 50 basis point rate cut. U.S. Treasuries account for 80.2% of the reserves of major stablecoins. The market expects interest rates to be cut by a total of 75 basis points by the end of 2024, and stablecoins may face an additional revenue loss of $937.5 million, with a total loss of $1.5625 billion.
Tether’s USDT holds the largest share of U.S. Treasury-backed reserves, totaling $93.2 billion. Circle’s USDC holds $28.7 billion in U.S. Treasuries. Other stablecoins such as FDUSD, PYUSD, and TUSD hold smaller Treasury positions. Despite these potential financial setbacks, the stablecoin market has shown resilience. In September, the total market value of stablecoins increased by 1.50% to $172 billion, marking 12 consecutive months of growth.
