US Department of the Treasury Officially Recognizes RLUSD Alongside USDC and USDT

U.S. Department of the Treasury presentation slides have highlighted a new generation of rapidly growing private digital assets, in particular stablecoins and their implications for the U.S. Treasury market.

The analysis, presented recently by the Treasury, included a slide showcasing leading stablecoin issuers and their disclosed reserve holdings. Among the issuers was Circle, known for USDC, Tether, recognized for USDT, and Ripple, the issuer of RLUSD.

Despite launching in late 2024, RLUSD is already being acknowledged by the most influential government in the world.

This inclusion, spotted by industry voice SMQKE on X, is being seen as a pivotal moment.

“Despite launching in late 2024, RLUSD is already being acknowledged by the most influential government in the world. U.S. Department of the Treasury presentation slides, released 8 hours ago, highlights a new generation of rapidly growing private digital assets.”

The Treasury slide, part of a broader examination of stablecoins’ impact on U.S. government bond market dynamics, categorizes RLUSD among “self-reported stablecoin issuers” with disclosed reserve data.

This contrasts with the presentation’s main focus on two well-established stablecoin issuers—Circle and Tether—and how their tokens, USDC and USDT respectively, have become significant holders of short-duration Treasury assets.

Both Circle and Tether have over $30 billion in disclosed reserves, a portion of which is allocated to U.S. government bonds, especially those with less than one-year maturity.

However, as the presentation notes, tokenized money market funds (MMFs) and stablecoins are becoming increasingly attractive to institutional and retail investors, which will likely influence the demand for short-term government debt even further.

As these tokens gain traction, the integration of U.S. government assets into their liquidity management strategies will become more critical.

In the presentation, the Treasury department highlights how the growing capitalization of stablecoins, now over $120 billion in total, is impacting market dynamics.

As the report notes, the collective allocation of these tokens, especially those held in MMFs, is shifting rapidly toward Treasury bills, particularly those with less than one-year maturity.

This is a significant development, considering that in 2023 alone, the outstanding amount of U.S. Treasury bills with less than one-year maturity has risen to over $7 trillion.

Moreover, the presentation acknowledges that the growing demand for short-term government debt is also influenced by the increasing role of stablecoins in derivative markets.

These tokens are now used to facilitate new types of interest-rate swaps and other derivatives, further engaging them in the dynamics of U.S. Treasury market liquidity.

The presence of RLUSD in the Treasury’s analysis is notable as it enters this narrative not merely as a speculative token but as a reserve-backed stablecoin already considered in market stress scenarios.

According to the Treasury’s framework, RLUSD, much like its more established counterparts, contributes to the demand for short-term U.S. government debt and is part of a broader shift in liquidity sourcing for digital financial products.

This is especially pertinent in the present market environment, characterized by rising interest rates and the potential impact on broader macroeconomic stability.

The inclusion of a new stablecoin in the government’s assessment highlights the evolving nature of digital assets in the global financial landscape.