ARK Invest says stablecoins could revolutionize the US debt market.

ARK Invest revealed how stablecoins could revolutionize the US government bond market.

ARK Invest, one of the most influential digital asset analysts, maintains that stablecoins are poised to transform the U.S. debt market. With growth of over 20% so far this year, these digital currencies now exceed $259.000 billion and represent more than 1% of the country's M2 money supply.

Led by USDT and USDC, which together control more than 85% of the market, stablecoins are emerging in a scenario where international demand for US debt has fallen dramatically in recent years. Therefore, these digital currencies could occupy that space in a disruptive and strategic way for the national financial system.

ARK Invest sees stablecoins as key allies for the Treasury.

El report “Big Ideas 2025 report” ARK Invest's analyst highlights that the sustained decline in foreign demand for U.S. Treasury bonds, which has fallen from 23% to just 6% over the past thirteen years, opens up an unprecedented opportunity for stablecoins. These digital currencies, largely backed by U.S. government debt, are emerging as a key player that could offset the decline in traditional foreign investment in these assets.

The firm projects that the stablecoin market could grow five to tenfold over the next five years, driving demand for US debt to levels previously only achieved by sovereign countries. 

“We believe the stablecoin market is poised for exponential growth, with supply projected to increase five to tenfold over the next five years.”, said Lorenzo Valente, the firm's director of digital asset research. “This expansion could boost demand for US debt to levels previously supported by sovereign nations. Furthermore, stablecoins are reaching geographic areas and populations that traditional banking systems have been unable to serve, countering the de-dollarization movement currently underway.”

Currently, the two largest stablecoins in the market hold more than $220.000 billion in Treasury bonds, a figure that already exceeds the holdings of countries like Germany and South Korea, representing a radical shift in the global financial structure.

Why are stablecoins the new ally of the US Treasury?

Stablecoins work like “digital dollars” They combine the stability of the dollar with the speed and accessibility of cryptocurrencies. This makes them an ideal vehicle for investing in government debt, especially in a context where the Federal Reserve maintains a monetary tightening policy that limits its participation as a bond buyer. 

ARK Invest highlights that stablecoins act as a “Trojan horse” financial: they facilitate global trade and, at the same time, recycle dollars into Treasury bonds, reinforcing the demand for public debt.

This phenomenon also helps to counteract the global trend towards “de-dollarization”, as stablecoins reach regions and populations underserved by traditional banking, expanding the influence of the US dollar globally. The growing adoption of stablecoins could thus strengthen the dollar's position as a global reserve currency, while providing the Treasury with a robust and expanding source of private demand.

From innovation to regulation: transforming the bond market

The two largest stablecoins dominate the market with a combined share of over 85%. Their growing accumulation of US government debt positions these digital currencies as significant financial players, while challenging the traditional hegemony of countries and large institutions in holding Treasury bonds. This concentration of digital financial power could redefine the rules of the game in global debt markets.

ARK Invest maintains a strategic view of the crucial role these stablecoins will play in the U.S. economy in the coming years. 

The passage of regulations like the GENIUS Act in the U.S. Senate, which requires stablecoin issuers to back their assets with Treasury bonds, will further strengthen the integration of these digital currencies into the traditional financial system.

A new era for US public debt?

According to ARK Invest, the stablecoin market is on the verge of exponential expansion that could increase five to tenfold in size in less than a decade. This growth will transform the demand for government debt and change the way millions of people access dollar-linked financial assets, thus democratizing access to the global economy.

The US Treasury, aware of this reality, could adapt its strategies to take advantage of this new source of demand, balancing debt issuance with the risks associated with volatility and holding concentration. In this context, regulation and supervision will be essential to ensure that stablecoins contribute to financial stability and the strengthening of the dollar as a global currency.

In short, ARK Invest highlights that stablecoins are becoming a quiet revolution that could redefine the US debt market and the global financial system in the coming years.