An economic bulletin released by the Federal Reserve Bank of Kansas City says, “The effect of U.S. dollar stablecoins on the Treasury market will depend on the stablecoin market’s size and future growth.” U.S. banks currently allocate about 50 cents of every dollar in their assets to direct loans to the economy, totaling approximately $13 trillion. A hypothetical $1 shift of funds from a bank deposit to a stablecoin issuer is projected to decrease bank lending by around 50 cents, while simultaneously increasing total Treasury holdings by 30 cents, assuming current asset mixes hold for both banks and issuers. Should the stablecoin market expand as projected from its current $250 billion to $900 billion — a growth scenario considered within independent projections — this $650 billion shift could lead to a 1% decrease in both total bank assets and bank lending, translating into an estimated $325 billion reduction in available bank loans to the economy. The net effect on Treasury demand could vary depending on the source of funds for stablecoin purchases. Ultimately, any increased demand for Treasurys driven by stablecoins inherently diverts funding from other prior uses, including loans to the broader economy. As a result, the greenfield opportunity looms for platform and alternative lenders — the Upstarts and SoFis of the world that either have their own banks or use a mix of funding channels, including institutional investors, to capture at least some of that share of demand.