The Aptos Foundation, which supports the development of the Aptos decentralized network, recently announced the introduction of Ondo Finance’s yield-bearing stablecoin, Ondo US Dollar Yield (USDY), on the Aptos blockchain.
USDY, a digital asset backed by United States Treasurys, will be accessible to non-US residents through the Aptos blockchain.
It’s important to note that this asset has not yet been registered under the Securities Act in the United States.
The Aptos Foundation highlighted the role of stablecoins in providing financial services to underserved communities and democratizing access to finance.
Interestingly, stablecoin issuers and other crypto companies are becoming significant purchasers of US government debt.
Tether, for instance, backs its stablecoin with US dollar reserves and US Treasury bills. In 2023, Tether disclosed holding $72.5 billion in US Treasury bills.
The potential impact of stablecoins on the US dollar has garnered attention from notable figures, including former US lawmaker Paul Ryan.
Ryan emphasized that dollar-pegged stablecoins could bolster demand for the dollar, countering geopolitical moves to reduce its use in international trade.
He suggested that this could help sustain the US dollar’s dominance for decades.
In another development, Binance.US recently received regulatory approval to invest customer funds in US Treasury bills.
The agreement allows Binance.US to invest in these instruments provided it uses a third-party custodian and does not reinvest the funds in Binance-related businesses.
Looking ahead, research strategist Tom Wan predicts that the market for tokenized US Treasurys could reach $3 billion by the end of 2024.
He attributes this growth to tokenized Treasury offerings from companies like BlackRock and Securitize, which are expected to draw more capital into this emerging market.
Wan pointed out that BlackRock’s Institutional Digital Liquidity Fund (BUIDL) is already the largest tokenized Treasury investment fund globally, signaling a growing interest in these digital financial instruments.
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