I wasn't interested in coins and didn't pay much attention to macroeconomics

[About the ball that Stable Coin is shooting]

I wasn't interested in coins and didn't pay much attention to macroeconomics, but I thought I should pay attention to stable coins that are circulating these days, so I took a look at them for the weekend.

Even if you don't trade stablecoins directly, I think this guy may continue to make significant changes in the market in the future, so here's what I'm going to share.

Stable coins literally refer to coins of stable value. It is a legal currency such as the US dollar or a cryptocurrency that minimizes price volatility by linking values to underlying assets such as gold.

No, a coin is basically a soaring price, and if you ask what kind of ghosting is this, it can be said that the utility of this coin can simply compensate for the shortcomings of inconvenient foreign currency remittances such as exchange loss and SWIFT CODE.

In the case of highly volatile coins such as Bitcoin and Ethereum, it is difficult to use as a means of transaction. However, low-value volatility cryptocurrencies such as stable coins can be used as a stable international payment method due to low transaction costs.

The problem is that this stable coin also needs to be trusted by users, and for this purpose, they have started using US government bonds as collateral. Although the US government did not specifically force government bonds to be collateralized, it seems that this was due to regulatory recommendations or financial stability demands.

Of course, the interest rate on T-Bills is now roughly over 4%, which would allow stablecoin issuers to sit back and generate revenue from their holdings.

If so, you may be curious about the level of U.S. government bonds that this stable coin buys, but according to a recent article, this is more than the amount of U.S. government bonds that Germany has. From now on, some numbers are going in, so let's have a little headache to understand the asset market.

For your information, all figures are from presentation materials released by the U.S. Treasury Department TBAC this October. (Subject: Digital Assets and the Treasure Market, Googling and it comes straight to you.)

Currently, the market capitalization of stablecoins is around 166 bUSD. (about 231 trillion won) The entire cryptocurrency market capitalization is 2,385 bUSD, and Bitcoin is 1,364 bUSD here. It's still insignificant, but the growth is scary because it was around 5 bUSD five years ago.

For reference, the total market capitalization of the US stock market is 59 tUSD, the real estate market is 52 tUSD, the total amount of commercial bank deposits is 17 tUSD, and the currency in circulation is 2 tUSD. The total amount of US government bonds that can be traded is about 27 tUSD, where short-term government bonds are 6 tUSD.

Stable coins have been secured by short-term US government bonds so far, and TBAC estimates this to be around 120 bUSD. If so, the proportion of stable coin companies among short-term government bonds can be seen as around 2%.

According to U.S. Treasury statistics, Japan has 1.1 tUSD, China has 0.7 tUSD, the U.K. has 0.7 tUSD, and Korea has 127 bUSD.

So, the U.S. bonds currently held by stablecoins have reached the level of Korea, and with the current trend, it can be expected to rise to the level of the Big 10 or Big 5 countries soon.

Sometimes some people say that China's sale of U.S. bonds will cause problems in the global economy, but in fact, from the perspective of the entire U.S. bond market, this is a little too much.

The total amount of U.S. bonds is around 35 tUSD, half of which are held by individuals and institutions in the U.S., about 4.4 tUSD is held by the Fed, and the rest are held by the U.S. Social Security Fund, military pension, and civil servants pension, with a smaller amount held by each country.

In any case, the emergence of stablecoins is creating new demand for U.S. bonds, which can lead to unexpected changes. It was believed that cryptocurrencies could reduce the value of existing dollars, but this phenomenon plays a paradoxical role in strengthening trust and demand for U.S. government bonds and dollars.

At this point, you can understand a little why Trump changed his old words like a flip-flop and came to support cryptocurrency as it is now. Of course, there may be various reasons, but in this context, there is no reason for the United States to keep cryptocurrency away.

It's not easy to keep up with the rapidly changing world. Cryptocurrencies that are still slowly beginning to affect the financial economy, and it doesn't seem to mean much to deny any more. It may be time to accept it. Of course, you'll have to filter out the straightforward person in the meantime.

2024.12.01 Preparation