Stablecoin demand is becoming consequential in the U.S. government debt market, but the maturity of that demand matters more than the headline total.
Washington now has two debt-market stories running at once. The federal framework for permitted payment stablecoins channels reserves into cash-like instruments and Treasuries with no more than 93 days remaining. Farther out on the curve, the Treasury Department said on Aug. 19 that it would at least double the maximum size of liquidity-support buybacks in the 10- to 20-year and 20- to 30-year nominal sectors beginning Sept. 9.
Together, those developments test a broad claim about digital dollars funding the United States. Stablecoin growth can reinforce demand for bills and overnight…