The rising adoption of stablecoins could reportedly increase the volatility of U.S. Treasury Securities with short-term maturities. Some analysts say that as these dollar-pegged cryptocurrencies grow, their volatility could spread to the bills market. Any disruption in the stablecoin market could trigger liquidations that could drive down Treasury prices, they say. In addition, if money moves from bank deposits to the stablecoin market, there could be less demand for U.S. Treasuries from banks. Other analysts counter that an increase in stablecoin activity would increase the number of buyers of T-bills, which are considered to be cash-equivalent securities, around the world. The stablecoin bill that is making its way through Congress would require stablecoins to be backed by liquid assets like T-bills. Already, two stablecoin issuers — Tether and Circle — hold a collective total of $166 billion in U.S. Treasuries. U.S. Treasury Secretary Scott Bessent has said that a codification of federal rules for stablecoins could boost demand for U.S. debt. The reserves that help maintain the peg of the coin are often a mix of assets that can be exposed to shocks. If there are fluctuations, stablecoin issuers must sell or rebalance those holdings to keep the peg or meet redemptions if and when they are demanded by holders. If an issuer has to sell assets in response to a swell in redemptions, losses may ensue.