Bitwise CIO Matt Hougan predicts stablecoins will rise significantly

Bitwise CIO Matt Hougan expects stablecoins to grow significantly. The San Francisco Federal Reserve has published research suggesting the sector is already doing something unusual for crypto: filling a gap left by one of the largest holders of US government debt. The Fed’s research says stablecoin issuers have offset more than 40% of the drop in Chinese holdings of US Treasuries since 2021. For an asset class long dismissed as a speculative sideshow, that is an odd new line on the résumé. What the San Francisco Fed found The findings come from a San Francisco Federal Reserve Economic Letter dated September 28, 2026. It describes stablecoin issuers as a substantial new buyer of US Treasury securities. According to the letter, issuers collectively added approximately $200 billion in Treasury holdings between 2021 and mid-2026. Over that same stretch, China was reducing its own position in US government debt. The scale of the stablecoin buying covered more than 40% of that Chinese decline. The growth has been steep. Stablecoin issuers’ holdings expanded more than tenfold within five years, according to the research. Since 2023, their purchases of short-term Treasury bills have also s...