Standard Chartered Executive: Stablecoins Could Mitigate Negative Impact of Fed Rate Cuts on Treasury and Money Market Tokens

Alexander Deschatres, Head of Sponsorship for Asia at Standard Chartered, has stated that stablecoins could help mitigate the negative impact of potential Federal Reserve rate cuts on U.S. Treasury and money market tokens.

Deschatres explained, “The $170 billion supply of stablecoins represents a pool of funds that could be converted into money market tokens and Treasury tokens, potentially providing a buffer against the negative effects of Fed rate cuts.” He pointed out that, according to federal funds futures, the market is currently anticipating a 100 basis point rate cut this year, which would bring the benchmark borrowing cost down to 4.5% by year-end. However, he noted that this yield remains attractive compared to the passive holding of stablecoins.