Stablecoin demand covers 3% of Treasury rollover, analyst says

Lawrence Lepard, an investment manager who wrote "The Big Print," has a message for the stablecoin-as-debt-savior crowd: check the math.

Even if the Digital Asset Market Clarity Act clears the Senate with 60 votes, the demand for U.S. Treasuries generated by stablecoins is too small to fix the government's debt problem, Lepard said on social media.

"Just want to correct one misperception that seems to be prevalent among some Bessent supporters," he wrote. "The notion is that the passage of the Clarity Act will lead to stablecoins saving the Treasury market is unproven."

Lepard laid out the numbers. The Treasury needs to roll roughly $8 trillion of debt each year. The current stablecoin market capitalization, mostly backed by Treasuries held by Circle and Tether, sits at $255 billion. That figure has been flat since January, when it touched $263 billion. At current levels, stablecoin demand covers about 3% of the annual rollover.

"3% coverage is not much," Lepard said. "Going to need Clarity passage and a lot of growth. Reminds me of DOGE."

Some supporters of Treasury Secretary Scott Bessent have pitched the CLARITY Act as a way to turbocharge stablecoin issuance, creating a fresh source of demand for government debt. Coinbase Chief Policy Officer Faryar Shirzad made the case publicly. "Dollar stablecoins turn growing overseas demand for digital dollars into demand for U.S. Treasuries," he said. "We need that at all points on the yield curve."

Lepard acknowledged that clearer regulation would likely boost demand for payment stablecoins over time. But the gap between the current scale and what would be needed to offset the $8 trillion annual rollover is enormous. A doubling of the stablecoin market to $500 billion would still cover only about 6% of issuance.

The problem is structural. Foreign holdings of U.S. debt have shrunk to 32% in 2025 from 57% after the 2008 financial crisis. That leaves a $2 trillion-plus hole in demand that domestic buyers and new sources of liquidity need to fill. Stablecoins add a new channel, but at their current size they barely register.

"The Treasury needs to roll $8 trillion plus of debt per year," Lepard wrote. "3% coverage is not much."

The CLARITY Act, which would give stablecoin issuers a federal regulatory framework, has bipartisan support in the House. Senate Democrats have raised their own concerns about the bill's consumer protections and its treatment of state-licensed issuers. Community bankers have lobbied for provisions that would let them issue stablecoins under the same framework as non-bank fintechs, adding another layer of negotiation to the Senate markup.

For now, the market's focus is on the size of the available base. At $255 billion in market cap, stablecoin Treasuries are a rounding error in a $28 trillion debt market. Growth is possible but not imminent: the market cap has been flat for four months.

"Going to need Clarity passage and a lot of growth," Lepard said.