Princeton University researcher: Stablecoins cannot solve the U.S. Treasury Department's rising debt cost problem

Deep Tide TechFlow News, January 7th, according to Forbes, Princeton University senior researcher Bill Dudley stated that stablecoins cannot solve the rising debt service costs of the U.S. Department of the Treasury. Although U.S. Treasury Secretary Scott Bessett has said that a thriving stablecoin ecosystem will increase private sector demand for U.S. Treasuries, thereby lowering government borrowing costs, Dudley believes this expectation is unlikely to be realized. He pointed out that stablecoin issuers are unlikely to purchase Treasury bills as quickly as Bessett suggested, mainly due to factors such as regulatory implementation taking time, the GENIUS Act prohibiting paying interest on stablecoins, the immediacy of stablecoin payments leading to higher turnover rates, and foreign restrictions on the use of dollar stablecoins. Furthermore, even if stablecoin demand increases, it will not significantly reduce the Treasury’s short-term financing costs; instead, it may decrease the Federal Reserve’s remittances to the Treasury due to reduced demand for dollar cash.