Bank of America’s (BAC) Prices Strategy Team said the US Treasury Market is increasingly shaped by two new forces: StableCOin demand for T-bills and tokenization of government debt-related assets.
BOFA considers stableecoins as less of a game elections for treasuries than for money market funds (Mmfs)Where their potential of higher dividends represents a competitive challenge, Wall Street Bank said in a report Monday.
The bank’s analysts expect stableecoin demand for government bonds to grow gradually in the order of $ 25 billion to $ 75 billion over the next 12 months, but not enough to change Bill Market Dynamics.
Stableecoins are cryptocurrencies whose value is bound to another asset, such as the US dollar or gold. They play an important role in cryptocurrency markets that provide a payment infrastructure and are also used to transfer money internationally.
According to BOFA, some MMF clients show increased interest in tokenization and consider it a defensive feature against stablecoins.
The report noted that bny in July, bny (BK)along with Goldman Sachs (GS)Designated blockchain-based technology to keep items over ownership of selected MMF shares.
The effort, partly spurred by stableecoin growth and the genius law, marked the first rollover of tokenized MMF shares.
With stableecoins currently limited from paying dividends, the money market funds see a narrow window to tokenize and offer competitive prices before regulatory changes or solutions hollow out the advantage, the report added.
Read more: StableCOin Supply to Grow As Much As $ 75b After Reviewing the Genius Act, Bofa says
