Bloomberg reported that a slowdown in cryptocurrency trading has suppressed stablecoin market growth, reducing a structurally important source of marginal demand for short-dated U.S. Treasury securities. Tether's USDT supply has declined, directly cutting reserve-driven T-Bill purchases that have supported Treasury auction demand in recent quarters.
For Armada's traditional desk, reduced stablecoin-driven T-Bill demand could soften auction clearing and widen repo spreads on Treasury collateral if primary dealer balance sheets must absorb more supply. For the crypto-collateral desk, tokenized T-Bills held as collateral could face modest price pressure if the broader stablecoin reserve bid continues to weaken, warranting a haircut sensitivity review.