Summary

• Stablecoins create a bid for short-duration Treasuries but cannot absorb 10Y or 30Y duration risk, reserve liquidity requirements preclude holding assets with meaningful interest-rate sensitivity.
• The Treasury's shift toward T-bill financing reduces long-end supply pressure but compounds front-end rollover risk, stablecoin demand directly absorbs that risk, making the two mechanisms mutually reinforcing at the short end of the curve.
• The long-end problem remains unsolved by either mechanism. Compressing 10Y and 30Y yields requires bringing foreign duration buyers back.

The long-end problem

The 30-year U.S. Treasury yield had pushed to 5.12% and the 10-year to 4.60%, both reaching multi-year highs. Concurrent sell-offs hit UK gilts, Japanese government bonds, and German Bunds. The pressure is not confined to bond markets: with the 30-year

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