CCData: It is expected that the Federal Reserve's interest rate cuts this year will lead to a total decrease of $1.5625 billion in interest income from stablecoins

ChainCatcher news, according to Cryptonews, the Federal Reserve recently decided to cut interest rates for the first time since March 2020, which is expected to impact the income streams of the five major centralized stablecoins. According to a report released by CCData on September 27, these stablecoins collectively hold nearly $125 billion in U.S. Treasury securities, and for every 50 basis points (bps) cut in interest rates, they could lose about $625 million in interest income. The report indicates that U.S. Treasury securities account for 80.2% of the reserves held by major stablecoins.

Data from the Chicago Mercantile Exchange's FedWatch tool shows that the market expects a total interest rate cut of 75 basis points by the end of 2024, including a 50 basis point cut in November and a 25 basis point cut in December. If these predictions come true, stablecoins could face an additional income loss of $937.5 million, bringing the total potential loss from the Federal Reserve's easing policy to $1.5625 billion.

Among the affected stablecoins, Tether's USDT holds the largest share of U.S. Treasury-backed reserves, totaling up to $93.2 billion, including U.S. Treasuries and repurchase agreements. Following closely is Circle's USD Coin (USDC), which holds $28.7 billion in U.S. Treasuries through the Circle Reserve Fund. Other stablecoins, such as First Digital USD (FDUSD), PayPal USD (PYUSD), and TrueUSD (TUSD), have smaller Treasury positions of $1.83 billion, $634 million, and $502 million, respectively.

Despite these potential financial setbacks, the stablecoin market continues to show resilience. According to CCData, in September, the total market capitalization of stablecoins increased by 1.50%, reaching $172 billion, marking 12 consecutive months of growth.