Several observers, including Arthur Hayes, chief investment officer at Maelstrom and co-founder of BitMEX, have said the coming low-interest rate environment could dampen demand for tokenized Treasuries, or digital representations of U.S. Treasury bonds that can be traded on a blockchain.
However, Alexander Deschatres, head of sponsor responsibility for Asia at Standard Chartered Bank, said stablecoins could mitigate the negative impact on Treasuries and money market tokens.
“A $170 billion stablecoin supply is a pool of money that can be converted into money market tokens and treasury tokens, potentially providing a buffer against the negative impact of the Fed’s rate cuts,” Deschatres told CoinDesk at an SC Ventures media event on the sidelines of the Token2049 conference in Singapore. SC Ventures is the innovation arm of Standard Chartered Bank.
