stablecoin supply initially soared in the low‐rate years (2019–2021) while the government’s interest costs stayed muted; effectively two disconnected worlds. 

then in 2022, the fed’s rate hikes sent interest outlays vertical at the same time stablecoin supply slumped (terra-luna, risk-off sentiment). 

yet by 2023–2025, both lines converge upward: stablecoins rebound (thanks to yield-bearing models and a “flight to quality”), and US interest expense keeps climbing as rates remain elevated.

what does this tell us? 
1. stablecoins have proven adaptable. Even as “traditional” yields rose and siphoned some capital away, stablecoin issuers responded by passing through T-bill yields, keeping crypto dollar demand high. 
2. the US government’s growing interest tab ironically strengthens stablecoin ecosystems, because those higher treasury returns attract stablecoin reserves.

stablecoin supply initially soared in the low‐rate years (2019–2021) while the government’s interest costs stayed muted; effectively two disconnected worlds. 

then in 2022, the fed’s rate hikes sent interest outlays vertical at the same time stablecoin supply slumped https://t.co/jZUcjuHUrz

Arhat

stablecoin supply initially soared in the low‐rate years (2019–2021) while the government’s interest costs stayed muted; effectively two disconnected worlds. 

then in 2022, the fed’s rate hikes sent interest outlays vertical at the same time stablecoin supply slumped (terra-luna, risk-off sentiment). 

yet by 2023–2025, both lines converge upward: stablecoins rebound (thanks to yield-bearing models and a “flight to quality”), and US interest expense keeps climbing as rates remain elevated.

what does this tell us? 
1. stablecoins have proven adaptable. Even as “traditional” yields rose and siphoned some capital away, stablecoin issuers responded by passing through T-bill yields, keeping crypto dollar demand high. 
2. the US government’s growing interest tab ironically strengthens stablecoin ecosystems, because those higher treasury returns attract stablecoin reserves.

https://x.com/0xarhat/status/1908957617566921035

Reseach & Investments at Primal Capital // arhat.mirror.xyz // 0xArhat.twitter // official bro of /broski

in short, we’re seeing the digital dollar and washington’s interest burden lock in a strange symbiosis, so long as the market trusts the dollar, stablecoins will ride that yield, and so long as stablecoins keep stacking T-bills, america’s debt remains in demand. 

it’s a feedback loop that quietly binds the on-chain economy to uncle sam’s balance sheet, for better or worse.