#149 - Stablecoins and U.S. Treasuries: A Risky Interdependence (with Yesha Yadav & Brendan Malone)

Stablecoins have grown from a total value of ~$2 billion in 2019 to over $230 billion by early 2025, enabling $33 trillion in transactions across 236 million wallets.

But beneath this growth lies a deep — and fragile — dependence on the U.S. Treasury market.

Professor Yesha Yadav of Vanderbilt Law School and Brendan Malone, formerly of Paradigm, the Federal Reserve Board, and MIT, discuss their paper on the critical but underexamined relationship between U.S. dollar stablecoins and Treasuries.

They unpack why Treasuries act as the “anchor” for stablecoins, explore operational and liquidity risks, and outline what policy changes might be necessary to avert a crisis.