"The $170 billion stablecoin supply represents a dry powder that can be channeled into money market tokens and Treasury tokens, potentially providing a cushion from the negative impact of Fed rate cuts," Deschatres told CoinDesk during the SC Ventures' media event on the sidelines on the Token2049 conference in Singapore. SC Ventures is an innovation arm of Standard Chartered.
According to several observers, including Arthur Hayes, the impending low interest rate environment is likely to curtail demand for tokenized Treasuries or digital representations of U.S. treasury securities traded on the blockchain.
According to Fed funds futures, the market is currently pricing 100 basis points of rate cuts this year, which means the benchmark borrowing cost will drop to 4.5% by the year-end.
Last month, Paris-based Kaiko data said the market for tokenized Treasuries will remain active while real or inflation-adjusted interest rates remain stable.
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