Executive Analysis: Digital Money – TBAC Q2 2025
Stablecoins Are at a Macro Crossroads
At the end of April, the U.S. Treasury quietly dropped one of its most significant digital asset documents to date: a paper titled "Digital Money." At PULP, this excites us, and we are going to break it down with our takeaways and projections for this exciting space. The fact that this briefing came from the heart of the U.S. financial establishment is a signal in itself. Digital assets have clearly and officially entered the institutional conversation, something that we have been mentioning for a while.
After years of regulatory gridlock under the Biden administration, the political tide has finally turned. The Trump administration, in line with its promise for financial innovation in the digital asset space, is now positioning stablecoins and digital money at the core of the U.S. economic strategy. Trump is sticking to his word saying that the United States will be the "crypto capital of the world." This isn't just about crypto adoption, it's about modernizing a broken and archaic payment system on top of reinforcing global dollar dominance. PULP believes that stablecoins are not just tools of speculation. They are the next evolution of money.
The U.S. Treasury Borrowing Advisory Committee (TBAC) is signaling that stablecoins will no longer be a sideshow in digital finance, they're becoming core monetary infrastructure. There are currently $234 billion in stablecoins circulating globally and the Treasury predicts that will surge to $2 trillion by 2028. Stablecoins are positioned to redefine dollar liquidity, debt markets and bank funding dynamics.
1. Moving from Crypto Rails to Treasury Gears
There are several key drivers that are leading the movement of stablecoins from crypto rails into the Treasury. There is a prominent dominance of USD-pegged coins, over 99% of the stablecoin market is pegged to the U.S. dollar. This is great for the U.S. government to have new buyers of its enormous debt. Stablecoin reserves essentially will equate to treasuries. Most major issuers of stablecoins like USDT and USDC back coins with short-dated T-bills. Tether, the issuer of the USDT stablecoin, is currently estimated to hold more U.S. Treasury securities than most foreign countries like Germany. In 2024 alone, Tether was the seventh-largest buyer of US Treasuries in 2024, outpacing countries like Canada, Mexico, Taiwan and Norway. Combined, Tether and Circle (USDC issuer) likely control well over $150 billion in U.S. Treasuries, making these two issuers collectively larger than Saudi Arabia, Switzerland and Ireland. These are some remarkable facts considering stablecoin legislation and widespread government acceptance has not been established yet. As countries buy less American debt, it is imperative for the Trump administration to establish and approve stablecoin legislation in order to secure more eager buyers of American debt.
Side Note: At PULP, we believe that while much of the current stablecoin spotlight falls on Tether and Circle, Ripple is quietly positioning RLUSD to become a major force in the next phase of the market. Built natively on the XRP Ledger (XRPL), a high throughput, low-cost, decentralized network optimized for payments, RLUSD is uniquely engineered for cross-border utility at scale. RLUSD is unlike many ERC-20-based stablecoins that rely on congested and expensive L1s, RLUSD inherits XRPL's built-in DEX, compliance features, and payment rails. It is ideal for institutional-grade, global settlement.
With Ripple's global banking relationships, recent U.S. regulatory clarity and years of groundwork in the payments ecosystem, we suggest that RLUSD could carve out a significant market share, particularly in corridors underserved by traditional USD infrastructure. We will be on the lookout as stablecoin regulation crystallizes. Ripple's history of working with regulators and enterprises may give it a first-move advantage in the compliant and high-volume segment of on-chain finance. We see RLUSD as a sleeping giant in this stablecoin race and one that could play a central role in dollarizing the next billion blockchain users.
2. Stablecoins vs. Banking System
It appears that bank funding might be at risk. There could even be a deposit outflow threat. If stablecoins become yield bearing, there's a credible rotation risk from low-yield deposits into blockchain-based alternatives. Stablecoins also serve as a stress amplifier. Like money market funds, stablecoins could become vehicles for rapid withdrawals during crisis events. Stablecoins have the hidden weapon of programmability and especially 24/7 liquidity. Banks really can't compete with the stablecoins' instant settlement, cross border fluidity and smart contract composability. Unless they integrate stablecoins or issue stablecoins themselves, banks will be left behind. There are many bank initiatives showing that major financial institutions are actively exploring or have announced plans to launch their own stablecoins like Bank of America and JPMorgan Chase's JPM Coin which is already facilitating significant daily transactions. Furthermore, we have noted that both PayPal and Stripe have entered the stablecoin arena. PayPal has introduced its own stablecoin, while Stripe is rolling out stablecoin accounts in over 100 countries. The infrastructure is built and many of these institutions are utilizing stablecoins and blockchain technology internally, just waiting for legislation to be passed in order to deploy it publicly. Internationally, banks are also entering the stablecoin space indicating a broader trend of traditional financial institutions embracing stablecoins to modernize payment systems and maintain competitiveness.
Sidenote: Fireblocks released a report titled "State of Stablecoins 2025" highlighting the transformative role stablecoins are playing in modernizing global payment systems. They note that Stablecoins are becoming core to financial infrastructure. In 2024, stablecoins accounted for nearly 50% of all transaction volume on the Fireblocks platform, underscoring their growing significance in global payments. Fireblocks processes 15% of global stablecoin volume, handling over 35 million transactions monthly through a network of more than 300 banks and payment providers.
The more important data covers industry adoption and readiness: 90% of surveyed institutions responded that they are actively engaging with stablecoins, moving beyond pilot programs to scalable implementations. Further, 86% report that their infrastructure like wallets, APIs and compliance tools is ready to support stablecoin operations. A translation of those statistics is that all institutions have a completely deployable and prepared stablecoin infrastructure ready for the instant that the legislation is established. Institutions that fail to do this are done for. Stablecoins are transitioning from experimental tools to essential components of the global financial ecosystem, driven by technological readiness, regulatory support and regional adoption trends.
3. Stablecoinization of Sovereign Debt
It is important to note that greater than $120 billion of T-bill demand already stems from stablecoin issuers. This is a sizeable chunk for being a completely unregulated industry. It is projected that there will be about a $900 billion demand increase by 2028 if stablecoins continue to grow. This aligns with short-term treasury issuance with crypto-native capital flows and could reshape demand concentration on the front end of the yield curve.
If they are regulated properly, PULP foresees that stablecoins could act as a liquidity anchor for the U.S. government. This will reinforce the attraction of foreign capital and create a deepening T-bill demand. This will become especially true as global investors seek digital access to dollar yield.
4. Tokenized MMFs could be A Competitor
The documentation also notes that stablecoins will definitely have their fair share of competition. The rise of tokenized money market funds like BlackRock's BUIDL and Franklin Templeton's BENJI will introduce this competitive tension.
One reason for this competition is MMF's yield advantage. MMFs are yield bearing, while stablecoins under the current GENIUS act verbiage are not. Money market funds also have collateral unity. They will eventually gain traction as on-chain collateral for institutional DeFi. Lastly, MMFs have issuer credibility. They are backed by regulated asset managers with clear redemption frameworks and this is an advantage over stablecoins.
PULP foresees the possibility of tokenized MMFs outcompeting stablecoins for corporate treasuries and institutional on-chain portfolios unless U.S. law allows interest bearing stablecoins. This could be a future battleground if legislation were to permit that.
5. USD Dominance could be Up in the Air
The U.S. dollar remaining the primary global reserve currency could be brought into question, but we think that stablecoins will reinforce the dominance of the USD. Key features of USD hegemony include the global trust in dollar stability, dollar-denominated trade, SWIFT and payment system dependence as well as treasuries serving as safe-haven assets.
Some risks are prevalent in this stablecoin landscape though. If a stablecoin were to de-peg that would cause systemic liquidity threats. Without Fed access or FDIC insurance, stablecoin liquidity spirals could transmit shocks and scares into traditional markets. This could cause widespread panic and issues.
A more positive outlook views stablecoins as an instrument to increase dollar demand. Even if stablecoins are issued offshore, their U.S. Treasury backing and USD peg amplify global dollar usage. This will further extend the reach of USD-denominated instruments into emerging markets and DeFi.
PULP agrees with the views of Scott Bessent and the Trump administration that stablecoins pegged to USD will help to extend USD hegemony into the digital world. Stablecoins will make it easier for users outside the U.S. to access dollars, further reinforcing the demand even in decentralized systems.
6. Money Supply & Monetary Policy: Neutral but Fluid
TBAC notes that stablecoins may not increase the net money supply but could restructure its composition. This would shift value from M1/M2 components into digitally-native forms.
This does raise a few new questions for the Fed though that they mention in this publication. Firstly, they pose the question of how we would measure money instrumentally in an increasingly tokenized world. Further, there is the question of whether or not monetary policy transmission can function effectively when core liquidity shifts off-chain. These are some things to keep an eye on as legislation develops.
7. Regulation through the GENIUS Act
The GENIUS act (2025) is the landmark bipartisan bill poised to become the comprehensive framework regulating stablecoins in the United States. It aims to provide regulatory clarity, enhance consumer protections and, yes, reinforce the U.S. dollar's dominance in the digital asset space. As mentioned earlier, PULP foresees it passing as a catalyst to growth in the stablecoin market by allowing financial institutions to enter the space all while ensuring consumer protection and financial stability.
The GENIUS act outlines 1:1 reserve backing with T-bills or cash equivalents. Moreover, it defines monthly reserve disclosures and establishes legal mandates for freeze/burn capabilities.
There are some missing pieces to the ACT that this document references. It is missing a mention of whether or not there will be master account access for issuers. Furthermore, it's missing infrastructure for FDIC insurance or formalized central bank backstop on top of no yield allowance, potentially limiting global competitiveness.
PULP sees the GENIUS act as a solid first step. The GENIUS act leaves open a very critical question and concern though: How will stablecoins remain competitive if they can't evolve fully-fledged yield-bearing digitized cash?
PULP Research Statistical Breakdown
Looking into the size of the global stablecoin market, we have seen explosive growth. From virtually zero in 2015, total circulating supply exceeded $227-240 billion by early 2025. Fiat-backed tokens dominate. Specifically, USDT and USDC have about 90% of the supply in market share. Major forecasts predict that the market will soon grow dramatically. Citigroup forecasts at minimum $1.6 trillion by 2030 and up to $3.7T in a bull scenario. We already touched on the U.S. treasury estimate of about $2 trillion by 2028. PULP predicts that stablecoin issuers will buy more U.S. debt than China, whose current holdings are about $784 billion.
PULP also looked into the on-chain transaction volume. Stablecoins now underpin vast on-chain flows. A crypto exchange report from Bastion found that roughly $27.6 trillion transferred in stablecoins during 2024. This exceeded the combined Visa/Mastercard network volume by about 8%. Coinbase noted $10.8 trillion in 2023 transactions. $2.3 trillion of that was genuine payments and remittances. Chainalysis confirms that stablecoins currently account for well over two-thirds of blockchain transaction value in recent months. Institutional metrics also reflect this scale as we mentioned earlier that Fireblocks reported stablecoins making up nearly half of all volume on its platform in 2024, processing more than 35 million transfers per month globally.
Payment adoption and use cases display that stablecoins are rapidly gaining real-world traction, specifically for cross-border payments and remittances. As mentioned earlier, Fireblocks surveyed and concluded that at least 90% of firms were actively integrating stablecoins for payments. Regionally, adoption is strongest where local currency instability or banks are inefficient. 71% of surveyed Latin American companies are using stablecoins for cross-border settlements. In Sub-Saharan Africa, stablecoins now constitute about 43% of all cryptocurrency transactions, as citizens have been turning to USD-pegged tokens amid local currency devaluations. Specifically, Nigeria saw roughly $59 billion in crypto transactions from mid-2023 to mid-2024. These trends reinforce and highlight the stablecoin appeal as a fast, low-cost medium of exchange and store-of-value in the payment landscape.
On-chain stablecoins have surged as daily transaction volumes on major tokens have consistently been reaching unprecedented highs. Bastion reported that Tether's 14-day average daily transfers doubled in 2024, from $19 billion to $44 billion. Such flow magnitudes seem to rival traditional rails and are showing stablecoins' viability as alternative payment networks.
Legislative Status & Market Impact
Let's now look into the current legislative status. In 2024 and 2025, Congress has moved rapidly on the GENIUS Act. After Senate Banking Committee approval in March 2025, the Senate overcame a filibuster in May 2025. As of late May, a key procedural vote cleared paving the way for a final Senate vote, expected in early June 2025. If passed, the bill will go to the House for review this summer 2025.
The market impact is massive here. Supporters argue that the GENIUS Act will keep innovation onshore by giving clarity and consumer protection. Well-capitalized stablecoins very well may attract institutional and retail users who were wary before. In practice, the law will tether stablecoins very closely to traditional banking norms. PULP sees this as potentially blurring the lines between crypto firms and banks. If the act is implemented as written, it could make U.S. digital dollars a global standard.
Globally, regulatory frameworks have been moving as well. In Europe, MiCA's stablecoin rules took effect in June 2024. Under MiCA, issuers of fiat-pegged stablecoins or multi-asset stablecoins must be authorized by an EU member state regulator. They are required to maintain 1:1 liquid reserves and honor redemptions at par. Issuers must publish detailed white papers, set up robust governance and risk management, and segregate customer assets from their own. In Singapore, MAS stablecoin framework has been finalized since 2023. Singapore's approach emphasized resilience and transparency, making it a competitive stablecoin hub in Asia. In May 2025, Hong Kong's legislature passed a Stablecoins Bill, establishing a licensing regime for fiat-referenced stablecoin issuers. Hong Kong is similar to Singapore in the respect that it hopes to foster fintech innovation while protecting investors. Further globally, many regulators are converging on similar rules. The UAE's Virtual Asset Law requires stablecoin issuers to maintain 100% backing and obtain a license.
Clear rules can accelerate mainstream uptake. In jurisdictions with well-defined frameworks, banks can integrate stablecoins with confidence. Taken all together, these market and regulatory trends suggest stablecoins could materially transform payments and finance. Early indicators that PULP has looked at including surging usage, growing institutional engagement and global policy alignment, points to stablecoins becoming core plumbing for 21st-century payments, as long as trust and regulation keep pace with innovation.
What PULP Research Sees Coming
In terms of stablecoin market cap, PULP expects $2 trillion by 2028 if GENIUS passes and institutional adoption accelerates aligning with the Treasury prediction. Similarly, UST demand will be an $800-900 billion in short-end T-bill demand from stablecoin growth. On the banking front, there is expected to be pressure on non-interest-bearing deposits and there is a potential for major changes to occur. In terms of the MMFs and stablecoin comparisons, PULP expects MMFs to win on yield but stablecoins to win on payments leading to a dual ecosystem. On the USD dominance front, PULP expects hegemony to be enhanced short term but not so much long-term. Long-term, the outcome is likely contingent on global interoperability. Without Fed integration, stablecoins remain exposed to liquidity crunches, so there is systemic risk and PULP forecasts additional structuring being added to legislation in order to combat this.
Final Outlook
Stablecoins are no longer just crypto plumbing. They're shaping the structure of sovereign debt demand, redefining deposit utility and becoming a core vector for dollar globalization. This marks an inflection point in the market and the setting of the stage for the next form of our money.
It marks a paradigm shift in global finance, not just a new payment mechanism. With everything that we have discussed, the global financial system is onboarding blockchain at scale. This transition opens the door to programmable money, real-time settlement, cross-border interoperability and dollar access in regions historically left behind.
At PULP Research, we view stablecoins as the digital equivalent of financial rails. It is important to note that rails are only valuable if there's meaningful economic activity running on top of them. That is where our investments into altcoins and utility coins come into play. These assets power decentralized networks that integrate with stablecoin inflows with the likes of LINK and SOL among others. Furthermore, our digital asset investments enable smart contract platforms to host the next generation of financial products, identity tools, and payment protocols. Moreover, they will capture liquidity flows as stablecoins become the reserve asset of DeFi and Web3 infrastructure.
In essence, stablecoins unlock the liquidity while utility-driven altcoins monetize that utility. By investing in sound, utility-driven altcoins, you're not just buying speculative assets, you're taking a position in the infrastructure stack of the future financial system. It's akin to investing in the internet's backbone during the early 2000s.
At PULP, we map tomorrow's money, today.
Disclaimer: This is not financial advice. Do your own research.