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⎈╲╱Stablecoins and monetary transmission · causal
Can stablecoin inflows affect short-term U.S. Treasury yields?
A revised 2026 BIS working paper estimates that a $3.5 billion stablecoin inflow lowers three-month Treasury-bill yields on impact and more over the following days.
Working paper
A revised 2026 BIS working paper estimates that a $3.5 billion stablecoin inflow lowers three-month Treasury-bill yields on impact and more over the following days.
The paper uses an instrumental-variable design and a current sample, but it remains a working paper and Bathymark has not reproduced the identification or data construction.
Literature record
Working paperWhat the reviewed source and linked counterevidence support.
Bathymark reproduction
Not startedThe paper's instrument and underlying flow panel are not available in Bathymark's current open-data stack.
Live validity
Not monitoredBallast tracks current stablecoin market value and stress, not Treasury-yield causality.
where the claim applies
Scope and horizon
Assets
Six major U.S. dollar-backed stablecoins in the paper's aggregate
Venues or data
Stablecoin market-cap and U.S. Treasury market data
Geography
United States and global stablecoin markets
Sample
January 2021 to March 2026
Horizon
Impact through roughly two weeks after a flow shock
source result
What the work reported
The revised paper reports that a $3.5 billion inflow lowers the three-month bill yield by 0.71 basis points on impact and by up to about 4 basis points within 10 days.
structured numbers
Stablecoin inflow shock$3,500,000,000
Three-month bill yield effect on impact-0.71 basis points
Three-month bill yield effect within ten days-4 basis points
how the result was made
Method and implementation boundary
Design
Local projections with a granular instrumental variable based on token-chain flow variation.
Measures
Five-day stablecoin flows and three-month Treasury-bill yield changes.
Reality gap
Market-cap change is used as a flow proxy and must not be relabeled as a directly observed subscription ledger.
Assumptions
The instrument affects Treasury yields through stablecoin flows rather than an omitted common shock.
Aggregate market-cap changes adequately proxy the stablecoin flow channel used in the model.
Limits
This is not yet a peer-reviewed result.
Stablecoin market-cap change can combine issuance, redemption, price, classification, and data-revision effects.
A market-level estimate does not prove the reserve purchases of any single issuer.
Required reality checks
Track working-paper revisions and any journal version.
Reconcile the aggregate with issuer-level reserve and issuance receipts where rights permit.
Retest the state dependence around Treasury-market stress.
What this cannot mean
That every stablecoin inflow buys Treasury bills immediately.
That stablecoin growth guarantees lower rates.
That a holder can infer an issuer's reserve state from the aggregate estimate.
source and version trail
The works behind this record
Bathymark stores curated bibliographic facts and its own paraphrase. It does not store the source abstract or full text. Open the original work to inspect the complete analysis.
Rashad Ahmed, Inaki Aldasoro · BIS Working Papers No 1270 · 2026
Published May 2025 and revised June 2026. Working-paper status remains visible.
Publication state
not peer reviewed
Reviewed version
June 2026 revision
Identifier
BIS Working Paper 1270
Source locator
Summary, contribution, findings, and abstract
Metadata reviewed
2026-07-13
Source text
Not stored
What it supports
Sample dates, identification design, flow shock, and Treasury-yield estimates.
append-only assessment memory
Status history
Working paperJune 2026 revision verified; peer review and independent replication remain absent.
current Bathymark context
Related live evidence, not a replication
Ballast tracks current stablecoin market value and stress, not Treasury-yield causality.
Reviewed 2026-07-13; next review 2026-09-13. The paper record is not a recommendation, forecast, or proof of current profitability. Information, not financial advice.