The Bank for International Settlements (BIS) has found that stablecoin flows have crossed into the market map central banks use to track dollar funding. This has significant implications for both crypto and traditional finance.
The BIS annual economic report highlights that private dollar tokens still fall short of the core tests of money, but their growth is becoming a measurable channel between on-chain dollar demand and sovereign debt markets.
A $3.5 billion stablecoin inflow can move three-month Treasury bill yields by about four basis points within 10 days, according to BIS working paper estimates. This means that stablecoins are now large enough for their reserve allocation to show up in the market used to price safe dollar liquidity.