30s Summary

The US Department of the Treasury’s 2024 report suggests blockchain technology can enhance finance, highlighting potential in tokenizing Treasury bills and employing smart contracts to improve transparency. The department also noted the increasing relevance of stablecoins for trading and payments. A member proposed creating a US-sanctioned blockchain for tokenizing maturing Treasury bills. Current market cap of stablecoins nears $180 million in 2024, led by Tether and Circle’s USD Coin. Additionally, tokenized real-world assets, such as Treasury securities and art, represent a global venture potentially worth $30 trillion.

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So, the US Department of the Treasury says that blockchain tech can beautify the world of finance, making it more efficient. To make this happen, our rules and regs need to grow and adapt, especially when it comes to how we handle traditional assets in the blockchain perspective, the Treasury’s 2024 report suggests.

In a chat held on Oct. 29, the Treasury examined the plus points of stablecoins and tokens that represent Treasury bills. They believe that tokenization could make trading Treasury securities easier by cutting down red tape in trading and settling.

They’ve been looking at distributed ledger technology (blockchain, with you and me) and smart contracts too. They think that it could bring more transparency to the Treasury market, shedding light on the activates in trading and benefiting regulators, issuers and investors. Smart contracts that are baked into tokens representing Treasury securities could make handling collateral easier and more efficient.

Stablecoins — kinda like crypto-bucks that are tied to the US dollar or other real-world currencies — are turning up as fundamentals for doing trades and payments, the committee says. They note that the demand for Treasury bills, a type of short-term US government bonds, seems to be on the rise thanks to stablecoins.

One member of the committee pitched the idea of the US creating a permitted blockchain for tokenizing Treasury bills which are soon-to-be matured. The report suggests a balanced approach, guided by a trusty centralized authority with support from the private sector.

Right now, the total market cap of stablecoins is hitting records in 2024 and is closing in on $180 million, according to CoinMarketCap. Tether (USDT) comes first among stablecoins with a market capitalization of $120 billion, while Circle’s USD Coin (USDC) is close behind with a market cap of about $35 billion.

And not to be left behind, tokenized real-world assets – like Treasury securities and artworks – represent an opportunity that could be worth $30 trillion globally, as per Colin Butler, Polygon’s international head of institutional capital.