Tokenized Treasury Market Grows, Potentially Challenging Stablecoins

According to Odaily, analysts at JPMorgan have observed a growing market for tokenized treasury bonds. These tokenized U.S. treasuries are increasingly being viewed as an alternative to stablecoins for yield generation and may challenge the dominance of stablecoins in the market. However, analysts caution that regulatory constraints and liquidity issues suggest that tokenized treasuries may only partially replace stablecoins. The analysts highlighted that major stablecoin issuers like Tether (USDT) and Circle (USDC) do not share reserve earnings with their users. This practice not only reduces their income but also classifies stablecoins as securities. Such classification would subject them to stringent regulatory oversight, potentially limiting their use as collateral in the cryptocurrency market.