The Stablecoin Discount: Evidence of Tether's U.S. Treasury Bill Market Share in Lowering Yields

Stablecoins represent a critical bridge between cryptocurrency and traditional finance, with Tether (USDT) dominating the sector as the largest stablecoin by market capitalization. By Q1 2025, Tether directly held approximately $98.5billioninU\mathrm{.}S\mathrm{.}Treasurybills,representing1.6$15 billion in annual interest savings for the U.S. government. Aligning with theories of liquidity saturation and nonlinear price impact, these results highlight that stablecoin demand can reduce sovereign funding costs and provide a potential buffer against market shocks.