Stablecoins May Mitigate Fed Rate Cuts Impact On Treasury Tokens

According to PANews, Alexandre Deschâtres, Head of Business Development at Standard Chartered Bank's blockchain division, Libeara, stated that the $170 billion stablecoin supply could potentially alleviate the impact of Federal Reserve rate cuts on treasury tokens. As the Federal Reserve is expected to begin a rate-cutting cycle on Wednesday, the reduction in rates might dampen the demand for treasury tokens traded on the blockchain. However, stablecoins can provide liquidity support for both the money market and treasury tokens. The market currently anticipates a 100 basis point rate cut by the Federal Reserve this year. Despite this, the 4.5% interest rate remains attractive compared to holding stablecoins.