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Arthur Hayes, the former CEO of BitMEX, has presented a case where the addition of stablecoins to the portfolio of giant banks in the U.S. would put more than $10T in the Treasury market. As Hayes explains, this monetary policy favors the growth of Bitcoin's value and amplifies the stock performance of companies like JPMorgan Chase.
His discussion highlights the potential advantages of stablecoins in U.S. debt markets as a new liquidity source that wouldn't create inflation concerns linked to traditional quantitative easing.
Hayes contends that the U.S. Treasury, led by Secretary Scott Bessent, faces the challenge of funding over $5 trillion in debt issuance this year without pushing the 10-year yield beyond 5%. The Federal Reserve, once the main buyer of government debt, has reduced its bond purchases to control inflation. As a result, Bessent is exploring alternative strategies to maintain demand for Treasuries.
The proposed mechanism involves transforming existing demand and time deposits within major U.S. banks into stablecoins. Hayes estimates that stablecoins like JPMorgan’s JPMD could unlock up to $6.8 trillion in T-bill buying capacity. These short-term securities provide banks with a near-zero interest rate position yet deliver an interest rate slightly higher than the Federal Funds.
Hayes further states that stablecoins will allow banks to automatically achieve operations and minimize their compliance costs, which could save up to $20 billion a year.
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Furthermore, Hayes also expects that the stablecoin model will be reinforced through regulatory reform. He points to the GENIUS Act, an early-stage proposed regulatory structure that would restrict stablecoin issuance to banks and their FinTech affiliates. The act limits non-banking companies such as Circle and bans the payment of interest on stablecoins, leaving power in the hands of giant financial institutions.
The second policy change that is being discussed is the abolishment of Fed Interest on Reserve Balances (IORB). Senator Ted Cruz and other Republican lawmakers have proposed that this action would reinvest up to $3.3 trillion of the idle reserves into Treasuries. Hayes thinks this combination, along with the liquidity facilitated by stablecoins, may create a kind of "stealth QE" that would prop up risk assets like Bitcoin.
In Hayes’ view, the rollout of bank-issued stablecoins will support a macroeconomic setup that strengthens digital assets. JPMorgan’s JPMD, set to operate on Coinbase’s Base network, will indirectly boost Ethereum’s transaction layer usage. Meanwhile, Bitcoin remains a primary beneficiary of broad monetary expansion.
However, Hayes warned that a temporary liquidity drawdown may occur as the Treasury refills its cash account after a debt ceiling hike. This move could withdraw up to $486 billion from markets. As a result, Bitcoin could fall briefly to $90,000–$95,000 before resuming upward movement later in 2025.
