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22/07/24
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U.S. Court Says Binance.US May Invest User assets in U.S. Treasury Bills
Three days ago, a court in the U.S. permitted Binance.US to invest customer funds in United States Treasury Bills. The U.S. District Court for the District of Columbia ruled that Binance.US can invest certain user funds via a third-party investment manager.
However, the condition is that the crypto exchange must ensure that the funds are not being invested back into the firm or any of its related entities. Likewise, the crypto exchange is required to produce data showing the costs related to maintenance of the custodied US treasury investments in its monthly report on expenses and operations.
Approval for investing user funds in Treasury Bills presages the potential role of crypto in terms of supporting demand for the weakening USD as BRICS nations are trying to de-dollarize.
People have floated collaterized stablecoins as a means of possibly extending the dominance of USD through the purchase and holding of United States debt instruments. This will ultimately offset part of the huge inflation from reckless fiscal policy, poor monetary policy, and more.
For instance, the company behind the USDT stablecoin (Tether) held United States Treasuries valued at $72.5bn last year which is the same as some developing nations. According to Tether, its USD-pegged stablecoin was overcollateralized for insurance against a major collapse.
The 54th speaker of the U.S. House of Representatives from 2015 to 2019 Paul Ryan previously mentioned how stablecoins can help in reducing the debt crisis and ensuring competitiveness of the USD in international trade markets. According to Ryan, USD-pegged stablecoins generate significant demand for USD and United States debt instruments, backing the value of tokens equivalent to fiat.
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