Stablecoins are now a real buyer of short-term US debt. Here’s what that means for Treasury markets, and for you.

Here’s something most stablecoin holders never think about.

The digital dollar in your wallet is probably helping fund the US government.

Not in a conspiracy-theory way. In a plain, legal, slightly boring way. When you buy a reserve-backed stablecoin, the issuer takes your dollar and parks most of it in short-term US Treasury bills.

Do that across a market worth roughly $300 billion and you’ve got a buyer of US debt that barely existed six years ago.

So what does stablecoin growth mean for US debt markets? Stablecoins have become a steady, rules-driven source of demand for short-term Treasuries. Inflows can nudge T-bill yields lower, outflows can push them higher, and in most cases the holder funding all of it earns nothing.

That last part is the one I want to dig into.

Key takeaways

• Reserve-backed stablecoins keep most of their reserves in cash, repos and Treasury bills, so their growth turns straight into demand for short-term US debt.
• Stablecoin issuers still hold less than 1% of all Treasuries outstanding. They move the front end of the curve, not the whole market.
• BIS research links a $3.5 billion stablecoin inflow to 3-month T-bill yields falling up to about 4 basis points within 10 days.
• Most stablecoin holders earn 0% while the reserve income stays with the issuer.
• USDS and sUSDS take a different path. Protocol revenue flows back to holders through the Sky Savings Rate, a variable rate set by Sky governance.

How Do Stablecoins Buy US Debt? The T-Bill Pipeline Nobody Sees

I can explain the pipeline in about ten seconds.

1. You swap $100 for 100 stablecoins.
2. The issuer owes you $100 and holds $100 in reserves.
3. Rules push those reserves into cash and very short-term government debt.

In the US, those rules come from the GENIUS Act, signed in July 2025. The OCC’s proposed rules list what counts as a reserve: cash, bank deposits, Treasury bills maturing in 93 days or less, certain repos, government money market funds, and tokenized versions of these.

The law kicks in by January 18, 2027 at the latest.

So every stablecoin minted under these rules is a fresh bid for T-bills. Every redemption is a sale.

Stablecoins and US Debt by the Numbers

Quick context. The US national debt crossed $40 trillion in August 2026. In the first nine months of fiscal 2026, net interest alone cost $827 billion. That’s more than the US spent on defense.

Washington needs buyers. Stablecoins have turned into one.

• $24 billion to $270 billion. USD stablecoin supply growth from 2020 to June 2026, per a new paper by Nellie Liang and Brent Neiman.
• Nearly $35 billion. What stablecoins spent on T-bills in 2025, roughly matching the largest government money market funds, per the BIS.
• Less than 1%. The share of Treasuries outstanding held by stablecoin issuers, according to Treasury’s own borrowing advisory committee.
• $800 billion to $1 trillion. Extra T-bill demand Standard Chartered sees if the market hits $2 trillion by end-2028.

Treasury Secretary Scott Bessent has floated similar numbers. I’d treat them as scenarios, though. Growth has cooled this year alongside crypto trading volumes.

Do Stablecoins Actually Move Treasury Yields?

A little. And now we can actually measure it.

The BIS working paper Stablecoins and safe asset prices studied daily data from January 2021 to March 2026.

A $3.5 billion inflow lowered 3-month T-bill yields by 0.71 basis points on impact and up to 4 basis points within 10 days. Longer maturities barely moved.

An IMF working paper found the same direction. When stablecoin market cap jumps 1%, 1-month and 3-month yields fall. Small moves, but they’re real.

The part that gets less airtime is the exit. An earlier version of the BIS study found outflows pushed yields up two to three times as much as inflows pushed them down.

Money that arrives slowly can leave all at once. That asymmetry is the part of stablecoins and US debt that keeps regulators up at night.

There’s a fair counterpoint too. The Kansas City Fed points out that if people fund stablecoins out of bank deposits, banks may buy fewer Treasuries. So net new demand could be smaller than the headlines suggest.

The Catch: Stablecoin Holders Fund the Debt, Issuers Keep the Yield

T-bills pay yield. Somebody collects it.

With most reserve-backed stablecoins, that somebody is the issuer. The GENIUS Act bars payment stablecoin issuers from paying you yield, so the reserve income stays on their side of the table.

Put simply: you supply the dollar. The issuer buys the T-bill. The issuer keeps the yield.

And a lot of those dollars just sit there. By Sky’s estimate, roughly 80% of stablecoins aren’t deployed into any source of yield. That’s money quietly funding Treasuries without earning its holder a cent.

Which is why “who keeps the yield?” matters as much as “who buys the debt?”

USDS, sUSDS and the Sky Savings Rate: Where the Yield Goes Instead

Sky.money gives you non-custodial access to Sky Protocol, which handles the same dollar differently.

USDS is Sky Protocol’s fully backed stablecoin, and it’s overcollateralized. On October 23, 2026, Sky.money showed $16.24 billion in collateral behind 10.02 billion USDS, about $1.62 for every dollar. You can check the mix yourself on the Sky financial dashboard. Here’s what backs a stablecoin if you want the full checklist.

Where does the revenue come from? Sky Agents tap USDS liquidity and put it to work across collateralized loans, US Treasury bills and lending markets. What they earn flows back into Sky Protocol.

For you, it works like this:

1. Supply USDS and receive sUSDS.
2. sUSDS accrues the Sky Savings Rate (SSR) automatically.
3. Exit to USDS anytime. No lockups, and no fees through Sky.money.

The SSR is a variable protocol rate funded from aggregate Sky protocol surplus. SKY holders raise or lower it through public onchain votes.

One honest detail: sUSDS isn’t exposure to any specific Agent, strategy or T-bill. You get the rate, not a slice of one position.

The numbers are public. In Q2 2026, Sky Protocol recorded $107.35 million in Gross Protocol Revenue, and $53.91 million went to sUSDS holders through the SSR.

sUSDS supply closed the quarter at $5.52 billion, up 149% year over year. It’s the world’s largest yield-generating stablecoin.

• Track record: the core protocol has run since 2017 without an exploit, from a team that’s spent close to a decade on stablecoin infrastructure.
• Rated: in 2025, S&P Global gave Sky Protocol the first credit rating ever assigned to a DeFi protocol.
• Risk discipline: Sky Frontier Foundation’s risk frameworks, among the most systematic in the space, tie each Agent’s access to capital to its performance.
• Built for steadiness: the SSR is engineered for strong risk-adjusted yield, not the biggest number on a leaderboard.

Risks still apply. Smart contracts can fail, and the rate can change. Need USDS first? You can convert 1:1 through the Peg Stability Module.

Lifeline or Liability? What Stablecoin Growth Means for US Debt Markets

Honestly? It depends who you ask.

The case for:

• A steady buyer at the short end can make government borrowing a bit cheaper.
• Dollar stablecoins spread dollar use abroad, and much of that demand lands in T-bills.

The case against:

• Money leaving bank deposits for stablecoins could mean less bank lending.
• A fast wave of redemptions could force T-bill sales right when markets are stressed.
• Leaning harder on short-term bills raises refinancing risk when rates jump.

Both sides can be right at once. That’s why what makes a stablecoin reliable matters more as this market grows: backing, liquidity, exits and transparency.

Stablecoins won’t fix a $40 trillion debt. They’re becoming part of how it gets financed, though.

Sky’s also working on ways to make capital movement data speak the same language in real time, whatever the vehicle or currency.

Quick Answers on Stablecoins and US Debt

Q. Do stablecoins hold US debt?

A. Yes. Reserve-backed stablecoins keep most reserves in short-term Treasury bills, repos and cash, making issuers a growing buyer of US debt.

Q. Does sUSDS pay T-bill yield?

A. No. sUSDS accrues the Sky Savings Rate, a variable rate funded from aggregate Sky protocol surplus. Treasury bills are one of several strategies feeding that revenue.

Could stablecoins hurt the Treasury market?

In a big run, possibly. Outflows move T-bill yields more than inflows do. That’s why reserves you can verify matter.

. . .

Over to you. Should stablecoin holders get a share of the yield their dollars generate, or is 0% a fair price for a stable dollar? Tell me in the comments. I read every one.

If you’d rather your stablecoins didn’t sit still, put them to work with sUSDS.

Stablecoins and US Debt: Who Keeps the T-Bill Yield? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

Most founders believe investors fund ideas. In practice, they fund evidence. An investable business shows, publicly and on paper, that it solves a real problem, is led by people who can execute, and is already gaining momentum. That is why PR strategy for startups matters: it puts that evidence in front of the right people before the first meeting.

1. A Real Market Need

This is where most startups fail. A CB Insights analysis of 101 startup post-mortems, summarised by the CMO Council, found that 42% of failed companies cited “no market need,” ahead of running out of cash (29%) and not having the right team (23%). Investors know these numbers, so they test for demand first.

What to show: Customer interviews, waitlists, pilot results, and a bottom-up market estimate. Seed investors want to see how you calculated your market size, because the method reveals how well you understand your customer and competitive position.

2. A Capable, Complementary Founding Team

Many investors weigh the team above the idea. They often look for co-founder history, since shared history tends to predict how a team handles pressure. A strong team covers product, sales, and operations, with visible domain experience.

What to show: founder bios with proof of past delivery, credible advisors, and key hires already made.

3. Traction and Growth Rate

Traction is demand made measurable. The bar has risen meaningfully since 2021, and investors now expect stronger proof that a product works in the real world. Traction is judged by growth rate rather than absolute size, so steady week-over-week momentum can outweigh a larger but flat number.

What to show: revenue, active users, retention, signed partnerships, or letters of intent.

4. A Clear, Scalable Business Model

Investors want to know how you make money and whether the model improves with scale. Pricing, margins, customer acquisition cost, and payback period should be explainable in two minutes.

Weak monetisation and poor marketing both appear in the failure data compiled by Quake Capital, where a lack of marketing was cited by 14% of failed startups.

What to show: unit economics, a revenue model, and a realistic path to profitability.

5. A Defensible Edge Over Competitors

Too much competition was cited by 19% of failed startups in the same research. Investors will ask what stops a larger player from copying you. Your answer might be proprietary technology, distribution, brand trust, regulatory know-how, or community.

What to show: an honest competitor map and the specific reason customers choose you.

6. Financial Discipline and Runway

Running out of cash was the second most-cited failure reason in the CB Insights data. Investors reward founders who know their burn rate, runway, and use of funds, and who keep clean records. Tidy books also speed up due diligence.

What to show: A simple financial model, a use-of-funds breakdown, and milestones tied to each funding stage.

7. Credibility, Reputation, and Third-Party Trust

This is the factor founders most often underestimate. Investors and partners search for you, and increasingly they ask AI tools about you.

Press coverage, expert commentary, customer reviews, and consistent messaging act as independent proof of everything above. Credibility built early shortens every later conversation.

Many founders bring in outside support at this stage, whether an in-house communications lead or a media partner such as 9-figure media, because third-party validation is hard to manufacture alone.

How PR Strategy for Startups Turns the 7 Factors Into Proof

A practical PR strategy for startups links each investor concern to a public asset:

• Market need: Publish original research or a data-backed industry insight report.
• Team: Secure founder interviews, podcast appearances, and bylined articles in trade media.
• Traction: Announce milestones such as customer wins, funding, and partnerships through press releases and case studies.
• Business model: Explain your approach in plain language through thought-leadership content.
• Competitive edge: pitch comparison-led stories and expert commentary that place you in your category.
• Financial discipline: share transparent updates with stakeholders.
• Credibility: keep your name, description, and facts identical across your website, LinkedIn, Crunchbase, and press coverage.

Sequencing matters. Start with the assets investors will check first, which are usually your website, founder profiles, and any existing coverage. Then build outward with earned media.

Specialist firms such as 9-figure media can help founders shape that narrative, but the underlying proof still has to come from the business itself.

Make Your Startup Citable by AI Search

Investors now research companies through answer engines such as ChatGPT, Perplexity, and Google AI Overviews. Earning citations there is known as Generative Engine Optimization (GEO). The foundational study is the Princeton-led paper GEO: Generative Engine Optimization, presented at KDD 2024. It found that adding citations, quotations from relevant sources, and statistics can raise a source’s visibility in generative responses by over 40%, with results varying by query domain.

Principles of AI citation you can apply today:

1. Lead with verifiable statistics. In the research, replacing qualitative claims with sourced numbers produced a 37 to 41% improvement on the study’s visibility metric.
2. 2. Attribute claims to named, credible sources and link to them.
3. Include expert quotations with the speaker’s name and role.
4. Write self-contained answers.Short, direct passages under clear headings are easier for AI systems to extract.
5. Avoid keyword stuffing. [Coverage of the paper] notes it offered little to no improvement and reduced visibility on Perplexity.
6. Keep facts consistent and current across every platform so AI systems can confirm who you are.
7. Earn third-party mentions.Independent coverage and profiles are strong trust signals for both humans and machines. This is another area where a media partner like 9-figure media can contribute, provided the coverage is earned and accurate.

Conclusion

Investors back startups that prove demand, team strength, traction, a workable model, defensibility, financial discipline, and credibility. A deliberate PR strategy for startups makes that proof visible, and GEO-minded content makes it citable when investors and AI tools go looking.

7 Factors Investors and Partners Look For in an Investable Business was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.