According to PANews, the Federal Reserve’s recent interest rate cut—the first since March 2020—is expected to influence the revenue of five major centralized stablecoins. A report from CCData, released on September 27, reveals that these stablecoins collectively hold nearly $125 billion in U.S. Treasury bonds. A 50 basis point (bps) rate cut could lead to an estimated $625 million loss in interest income. Notably, U.S. Treasury bonds make up 80.2% of the reserves held by these leading stablecoins.

Data from the Chicago Mercantile Exchange’s FedWatch tool indicates that the market anticipates a total rate cut of 75 bps by the end of 2024, including a 50 bps cut in November and an additional 25 bps cut in December. If these projections are realized, stablecoins could face an extra $937.5 million in revenue losses, bringing the overall potential loss from the Fed’s easing policy to $1.5625 billion.

Among the impacted stablecoins, Tether’s USDT holds the largest share of U.S. Treasury-backed reserves, totaling $93.2 billion, which includes Treasury bonds and repurchase agreements. Circle’s USD Coin (USDC) follows with $28.7 billion in Treasury holdings through the Circle Reserve Fund. Other stablecoins like First Digital USD (FDUSD), PayPal USD (PYUSD), and TrueUSD (TUSD) maintain smaller Treasury positions of $1.83 billion, $634 million, and $502 million, respectively.

Despite these anticipated financial challenges, the stablecoin market remains resilient. CCData reports that in September, the total market capitalization of stablecoins grew by 1.50%, reaching $172 billion, marking twelve consecutive months of growth.