The Crossover
The Machinery · Episode 4 of 6
This is Viv's Notebook.
Who's buying America's debt now
Stablecoin providers already own nearly $200 billion of Treasury bills and other close-to-maturity Treasury securities. The question that matters more is what happens when people want their money back.
5 min watch · Macro & Economics · Always free
When you buy a dollar stablecoin, your dollars end up in Treasury bills, or lent out overnight against them, because the reserve has to be safe and quick to sell. In September 2026 the Deputy Secretary of the US Treasury named stablecoin providers as a buyer of American government debt that has grown fast since 2022.
This entry looks at who holds that debt, how big a share of the bill market it is, and what the clearest test so far showed. It ends on a question about Tether's reserve once the law applies to it.
For education only, not financial advice. Crypto assets are volatile and you can lose all the money you invest.
Transcriptlightly edited
Who the Treasury says is buying
So, who’s buying America’s debt now?
On September 22nd, 2026, the Deputy Secretary of the US Treasury, Francis Brooke, gave a speech about who buys American government debt. He named a buyer that has grown fast since 2022.
These are his words: stablecoin providers “already own nearly $200 billion of Treasury bills and other close-to-maturity Treasury securities.”
Where your stablecoin dollars go
When you buy a dollar stablecoin, you hand a company real dollars. The company has to hold those dollars in reserve, and the reserve has to be safe and quick to sell. Short-term US government debt fits that better than anything else does.
So your dollars end up in Treasury bills, or lent out overnight against them. The GENIUS Act will make that kind of reserve compulsory, but the issuers were holding it before the law passed.
Tether and Circle hold almost all of it
Almost all of that $200 billion sits with 2 companies. Tether has about $140 billion of it, and Circle about $60 billion. Every other stablecoin put together has about $42 billion in circulation.
Of the $200 billion, about $78 billion is repo, which means lending cash out overnight and taking Treasuries as security. The bills Tether and Circle actually own come to about $122 billion.
Circle is mostly repo. At the end of July ’26 it owned $7.7 billion of Treasuries outright, and had $52.7 billion lent out overnight.
How big the stablecoin share is
So how big is that against the market it’s buying in?
The IMF measured it in January. At the middle of 2025, the largest stablecoin issuers held 1.7% of the US Treasury bill market.
I did the same math on the latest numbers, using Tether’s and Circle’s own reports against the Treasury’s figures for bills outstanding at the end of August. It comes out at 1.7%.
More than a year later, the share hasn’t moved. In July and August alone, the Treasury added more than $550 billion of bills. That’s about 2.8 times everything the whole stablecoin sector holds.
Stablecoins themselves have barely grown either. There were about $296 billion in circulation a year ago, and there are about $311 billion now. That’s about 5% growth in a year, and it’s been flat since March. The Federal Reserve said the same in May, saying “Stablecoin growth moderated in recent months.”
What a run would test
The question that matters more is what happens when people want their money back.
The clearest test so far came in March ’23, when Silicon Valley Bank failed with $3.3 billion of Circle’s reserves inside it, about 8% of the total. Circle said so publicly on Friday night, and USDC came off its peg. Over that weekend it traded as low as 86 cents on the dollar.
Circle paid those redemptions out of the cash it held at the banks. That cash fell from $11.5 billion on March 6th to $3.7 billion by the end of the month. The Federal Reserve’s own study says Circle might have had to sell Treasuries if the run had gone differently. So the Treasury market was never actually tested.
Stablecoin issuers have no deposit insurance and can’t borrow from the central bank. In a big enough run, they may have to sell what they hold. Circle’s own annual report covers the most extreme case, a demand to redeem all or nearly all the USDC in circulation. It says the market for short-dated government debt “could experience price instability.” And it says the reserve “may not be sufficient to cover all such redemption requests.”
But nobody has documented a single case of stablecoin issuers moving the Treasury bill market by selling, at any size.
The IMF said in April that how committed stablecoin issuers stay to Treasury bills and repo under stress “remains untested.”
Tether’s reserve under the GENIUS Act
And that rule that will shape all of this hasn’t started yet. The GENIUS Act reserve requirements don’t bite until January 18th, 2027. About a quarter of what Tether holds wouldn’t qualify. That’s the gold, the bitcoin and the secured loans.
So the question I’d ask is what Tether’s reserve looks like once the law applies to it, and what happens the first time a run tests it.
Closing
I unpack this kind of thing every weekday in The Crossover. It’s free, and it’s at thecrossover.io.
Supporting notesdrawn from the transcript
Almost all of the $200 billion sits with two companies, about $140 billion with Tether and about $60 billion with Circle, and about $78 billion of it is repo, cash lent out overnight against Treasuries. The bills the two actually own come to about $122 billion. The IMF put the largest issuers at 1.7% of the US Treasury bill market in mid-2025, and the same calculation on Tether's and Circle's latest reports still comes out at 1.7%. In July and August alone the Treasury added more than $550 billion of bills, about 2.8 times everything the stablecoin sector holds, and stablecoins in circulation grew only about 5% in a year, from about $296 billion to about $311 billion.
The clearest test came in March 2023, when Silicon Valley Bank failed with $3.3 billion of Circle's reserves inside it and USDC traded as low as 86 cents on the dollar. Circle paid redemptions from the cash it held at the banks, so the Treasury market was never actually tested. In a big enough run, issuers may have to sell what they hold, yet nobody has documented a single case of stablecoin issuers moving the Treasury bill market by selling. The GENIUS Act's reserve requirements don't bite until January 18th, 2027, and about a quarter of what Tether holds, the gold, the bitcoin and the secured loans, wouldn't qualify.
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This entry ends on what Tether's reserve looks like once the law applies to it, and what happens the first time a run tests it. If you have a view on either, say so below. The questions that come back here are where a lot of these entries start.
