Guangda Securities: Stablecoin essentially extends the credit of the US dollar, but in the long term, it may exacerbate market risks.

Guangda Securities issued a research report stating that on the one hand, the characteristics of the US dollar stablecoin help expand the functions and use cases of the US dollar, consolidating and enhancing the US dollar's position in the international monetary system, and prolonging the dominance of the US dollar. On the other hand, linking the US dollar stablecoin to US Treasury bonds helps partially alleviate the pressure of US government debt. However, the US dollar stablecoin is essentially an extension of US dollar credit and does not fundamentally address the US dollar's twin deficits problem. In the long run, it may actually increase risks: first, the issuance of US dollar stablecoins is anchored to short-term bonds and does not solve the problem of long-term bond issuance. Currently, long-term Treasury bonds account for 70% of US outstanding government debt. Second, the expansion of the US dollar stablecoin's scale will exacerbate instability in the short-term US Treasury bond market, weakening the ability of macroeconomic policy adjustment.