As stablecoins grow in popularity, their impact on global markets is becoming harder to ignore. This is especially true when it comes to who’s financing U.S. debt.
Why does a small Caribbean territory buy so many Treasurys? The Cayman Islands has no corporate income tax and is the legal home to many of the world’s hedge funds. When these funds buy Treasurys they count toward the Cayman Islands’ total, despite the fact that most funds are managed from elsewhere.
When compared to these large foreign holdings, stablecoin issuers come in seventh place. Tether and Circle bought about $41 billion in U.S. Treasurys directly, more than countries like Singapore, Norway, and Israel.
