Stablecoin issuers purchased $109 billion in US Treasury bills between July and November 2025, driven by federal regulations that require full backing of digital dollar tokens with government debt. The mandate, embedded in the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, transformed the $309 billion stablecoin market into a reliable funding mechanism for federal operations while shifting regulatory control from the Federal Reserve to the Treasury Department.
What Happened: Treasury Purchases Surge
President Donald Trump signed the GENIUS Act on July 18, 2025, establishing the first federal framework for payment stablecoins. The legislation requires all stablecoin issuers to maintain 100% reserves in US dollars or short-term Treasury bills, excluding corporate bonds and bank deposits. This provision converts each stablecoin transaction into an automatic Treasury purchase, as companies must buy government securities equal to the value of tokens issued.
The stablecoin market grew from $200 billion to $309 billion during this period, according to European Central Bank data from November 2025. Tether's USDT held $184 billion in market capitalization, while USD Coin (USDC) maintained $75 billion. Analyst Shanaka Anslem Perera detailed the requirement in his analysis, noting the mandate appeared within 47 pages of technical regulation.
Between July and November, issuers bought approximately $908 million in government debt daily over 120 days. Treasury Secretary Scott Bessent told the Treasury Market Conference on November 12, 2025, that auction sizes would hold steady due to stablecoin-driven demand. Bessent projected the market would reach $3 trillion by 2030, generating $114 billion in annual government savings.
The Bank for International Settlements found that a $3.5 billion increase in stablecoin market capitalization reduces government borrowing costs by 0.025%. At the projected $3 trillion mark, this translates to $900 per household in savings. A Brookings Institution analysis from October 2025 estimated stablecoins could produce $2 trillion in additional demand for US government debt.
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Why It Matters: Regulatory Power Shifts
The GENIUS Act transferred oversight of stablecoin issuers to the Office of the Comptroller of the Currency, an agency within the Treasury Department. The OCC announced in July it would supervise both bank and nonbank stablecoin issuers, removing regulatory authority from the Federal Reserve. This consolidation gives Treasury officials direct influence over monetary conditions through digital asset policy, extending beyond traditional interest rate decisions.
"The government doesn't need to find buyers for its debt anymore," Perera stated in his analysis. "The law creates the buyers automatically. Every time someone anywhere in the world buys a digital dollar, a stablecoin company is legally required to buy a Treasury bill with that money."
JPMorgan, the country's largest bank, began accepting Bitcoin as collateral after years of resistance, reflecting institutional recognition of the regulatory realignment.
Observers noted that both Bessent and David Sacks shaped the policy framework. The Treasury launched a public comment period in September 2025 for implementation guidelines covering reserve requirements and eligible assets, signaling continued refinement as the market approaches trillion-dollar levels.
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Final Thoughts
The GENIUS Act converted stablecoins into a permanent funding source for federal debt while consolidating regulatory power within the Treasury Department. The mechanism generated $109 billion in mandatory Treasury purchases during its first four months, establishing digital dollar adoption as a parallel channel for government financing.
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