Trump’s Stablecoin Law Spurs Treasury Demand Surge — GENIUS Act Reshapes U.S. Debt Market

TradingKey – Following the enactment of the GENIUS Act, the U.S. Treasury has ramped up short-term debt issuance to meet rising demand driven by stablecoin collateral requirements. 

On Tuesday, August 5, the Treasury increased its 4-week T-bill auction by $5 billion to $100 billion, while 8-week and 17-week bills remained unchanged at $85 billion and $65 billion, respectively.

Signed into law by President Donald Trump on July 18, 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act mandates that USD-pegged stablecoins be backed by U.S. Treasuries or dollars. This requirement has created a new source of demand for government debt, as stablecoin issuers must hold liquid reserves to maintain compliance.

The Treasury Borrowing Advisory Committee has acknowledged that stablecoin growth is now a structural driver of T-bill demand, particularly among fintechs and non-bank issuers.

Tether Leads the Charge

• USDT, issued by Tether, remains the world’s largest stablecoin with a market cap exceeding $160 billion, commanding 58% of the global stablecoin market
• According to Tether’s Q2 financials, the company now holds over $127 billion in U.S. Treasuries, surpassing South Korea to become the 18th largest holder of U.S. debt globally