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Indian Express
4 days ago
- Business
- Indian Express
As stablecoins gets greenlit in the US, India's chance to lead this fintech space
A quiet but powerful shift is taking place in the global financial system — and it's happening through the world of fintech. Last month, the US Senate passed the GENIUS Act, a landmark legislation that gives American banks and even large companies like Amazon and Walmart the legal green light to issue digital dollars — known as stablecoins — on public blockchains. What are stablecoins and why do they matter? These stablecoins aren't just another form of cryptocurrency. They are fully backed, 1:1, by US government Treasury Bills. In simple terms, this means a bank in the US would be able to issue a digital version of the dollar, backed by government bonds, and it can be used for payments across the world. This brings together the trust of government securities and the speed and transparency of blockchain technology. What's important is that this Bill passed with a rare bipartisan majority — 68 votes in favour — shows just how seriously the US sees this as part of its economic and strategic playbook. The goal is clear: Make the dollar stronger, reduce borrowing costs, and lead the transition into a digital-first financial system. Secretary of the Treasury Scott Bessent put it clearly: 'Stablecoins could end up being the largest buyers of US Treasury Bills. If you're using a stablecoin in Nigeria, it's backed by the US dollar.' This is smart, digital diplomacy. As more stablecoins circulate globally, demand for US debt increases, borrowing costs go down, and the dollar's dominance is reinforced in the digital era. India's opportunity: Adapt to lead Now let's look at this from India's point of view. The RBI has expressed valid concerns about unregulated cryptocurrencies, particularly from a monetary policy and consumer protection standpoint. But what the US is doing is different — it's about using the blockchain infrastructure to deepen public trust in digital money, without compromising on sovereignty or fiscal control. India, too, has ambitions to reduce its government borrowing costs — from around 6 per cent today to levels closer to those of developed economies, around 3 per cent. But our conventional tools — like rate cuts — are limited, because of their inflationary consequences which erode the value of household savings. Like the US, we too can explore market-based mechanisms like tokenised government debt — under regulatory oversight — as a way forward. At the same time, we must recognise the bigger picture: The stablecoin ecosystem isn't just about finance — it's about the future of fintech. It touches payments, digital wallets, eKYC, blockchain infrastructure, cybersecurity, tax compliance, and new forms of savings and investing. We are already seeing this globally. Emirates Airlines, the UAE's flagship carrier, is now ready to accept cryptocurrencies as a form of payment — proof that digital assets are not confined to speculation, but are actively being integrated into real-world commerce. This is no longer a fringe industry — it is becoming the new face of financial services and digital commerce. India's youth are global leaders in digital innovation. From UPI to Aadhaar to ONDC, we've built the rails. But when it comes to blockchain-based financial products, many of our most talented developers and startups find themselves in regulatory limbo — either operating from abroad or working under the radar. This is a clear opportunity to get them back into the mainstream and contribute in national interest. The Supreme Court itself has recently called upon the need to regulate the sector that is otherwise turning parts of the payments sphere into a 'refined form of hawala.' Without a clear policy, legitimate fintech innovation remains stuck at the margins, while the grey areas expand. Regulation is not just about control — it's about creating legitimacy, accountability, and scale. With proper regulation, this space could unlock high-paying, high-skilled jobs, attract domestic and foreign investment, and formalise an industry already brimming with Indian talent. Our startups should not have to relocate to Singapore or Dubai to build globally competitive products. They should be able to do it from Delhi, Bengaluru, Hyderabad, and Mumbai — with the full support of Indian law. India must lead, not lag Today, less than 15 per cent of Indian households invest through formal market channels like mutual funds. Most of our household savings still sit in fixed deposits or gold. With safe, regulated digital assets backed by sovereign bonds, we can widen financial inclusion, offer better returns, and deepen our capital markets while potentially reigning in inflation that tends to erode the value of household savings over the long-term. The Department of Economic Affairs is expected to release its long-awaited consultation paper on crypto regulation soon. That presents a historic opportunity. We can craft a framework that reflects Indian values — trust, transparency, and stability — while embracing the potential of fintech to create jobs, strengthen the rupee, and modernise our economy. The world is not waiting. The US is using stablecoins to lower its borrowing costs and secure its global financial influence. India has a clear window of opportunity here to adapt and then, lead. A strong, forward-looking regulatory framework will ensure that our fintech future is built in India, for India, and for the world. The writer is national spokesperson, BJP
Zawya
5 days ago
- Business
- Zawya
Oman's central bank issues treasury bills worth 26.6mln
Muscat: Oman's central bank has issued treasury bills worth OMR10.25 million on Monday. The value of the allotted Treasury bills amounted to OMR10.25 million, for a maturity period of 91 days. The average accepted price reached OMR98.941 for every OMR100, and the minimum accepted price arrived at OMR98.930 per OMR100. The average discount rate and the average yield reached 4.24871% and 4.29421%, respectively. Treasury Bills are short-term highly secured financial instruments issued by the Ministry of Finance, and they provide licensed commercial banks the opportunity to invest their surplus funds. The Central Bank of Oman (CBO) acts as the Issue Manager and provides the added advantage of ready liquidity through discounting and repurchase facilities (Repo). It may be noted that the interest rate on the Repo operations with CBO is 5.00% while the discount rate on the Treasury Bills Discounting Facility with CBO is 5.50%. Furthermore, Treasury Bills promote the local money market by creating a benchmark yield curve for short-term interest rates. Additionally, the Government may also resort to this instrument whenever felt necessary for financing its recurrent expenditures. © Muscat Media Group Provided by SyndiGate Media Inc. (
Times of Oman
5 days ago
- Business
- Times of Oman
Oman's central bank issues treasury bills worth OMR10.25 million
Muscat: Oman's central bank has issued treasury bills worth OMR10.25 million on Monday. The value of the allotted Treasury bills amounted to OMR10.25 million, for a maturity period of 91 days. The average accepted price reached OMR98.941 for every OMR100, and the minimum accepted price arrived at OMR98.930 per OMR100. The average discount rate and the average yield reached 4.24871% and 4.29421%, respectively. Treasury Bills are short-term highly secured financial instruments issued by the Ministry of Finance, and they provide licensed commercial banks the opportunity to invest their surplus funds. The Central Bank of Oman (CBO) acts as the Issue Manager and provides the added advantage of ready liquidity through discounting and repurchase facilities (Repo). It may be noted that the interest rate on the Repo operations with CBO is 5.00% while the discount rate on the Treasury Bills Discounting Facility with CBO is 5.50%.
Reuters
5 days ago
- Business
- Reuters
A slew of T-bills coming? Money market funds say 'bring 'em on'
NEW YORK, July 14 (Reuters) - More than $1 trillion in U.S. short-term bills are expected to flood the market over the next 1-1/2 years following the increase in the debt ceiling, as the Treasury replenishes its diminished cash balance while funding the country's huge fiscal deficit. There is, however, no shortage of buyers, with money market funds leading the way. Armed with a record $7.4 trillion in assets as of July 1, money funds, which invest in short-term, low-risk securities such as Treasury bills and repurchase agreements, or repos, are ready to take on more supply. The debt ceiling increased by $5 trillion to $41.1 trillion two weeks ago following the signing into law of the "One Big Beautiful Bill." The Treasury's operating balance had dropped to $313 billion on July 3, data from money market research firm Wrightson ICAP showed, the day before President Donald Trump's tax and spending bill was enacted. Treasury bills are critical to financial markets and the broader economy, given their role as safe and liquid assets, and are a key tool for funding government spending. In turning to short-term debt to fill its coffers, U.S. Treasury Secretary Scott Bessent had said it does not make sense to increase long-term bond sales at current interest rates. The Federal Reserve has kept the benchmark federal funds rate in the 4.25%-4.50% range since December. J.P. Morgan, Barclays, and TD Securities have estimated new issuance of Treasury bills alone over the next 18 months of between $900 billion and $1.6 trillion, higher than their initial projections before the debt ceiling resolution. "It sounds like a large amount of issuance coming from the Treasury, but we welcome it and feel that we will have no trouble accommodating it," said Susan Hill, senior portfolio manager and head of the government liquidity group at Federated Hermes, with assets under management of $631.1 billion. The firm has a suite of government and prime money market funds. Bank estimates on short-term supply over the next 1-1/2 years, however, paled in comparison to Treasury bills issued following the last debt ceiling saga two years ago. The Treasury had issued $1.1 trillion in three months from June 2023, as it reloaded its cash account that had dwindled to just $23 billion. Lou Crandall, Wrightson's chief economist, said the Treasury is in a much stronger position now than in 2023. "The debt ceiling impasse didn't go down to the wire this time, so they're starting out with $300 billion more in cash," said Crandall, providing ample cushion for the Treasury. Still, this year's projected T-bill supply exceeds that of past debt ceiling events. In 2011, the Treasury issued about $300 billion in T-bills in the months following the debt limit increase in August 2011. In 2013, the Treasury issued roughly $400 billion in bills by the end of that year. Fast forward to 2025, and bank estimates of additional T-bill supply for the next five months ranged from $650 billion to $830 billion. With the spending bill's approval, the Treasury last Tuesday raised the size of last week's four-week and eight-week bill auctions by a larger-than-expected $25 billion each to $150 billion for both offerings. It also announced another $225 billion in three T-bill auctions scheduled this week. Those increases are likely to represent the bulk of adjustments for bill auction sizes for July, although the Treasury might not be quite done yet. "There's plenty of money market funds that had been avoiding maturities like those on August bills (due to the debt ceiling restrictions), so that part of the curve is going to be pretty well subscribed," said Jan Nevruzi, U.S. rates strategist, at TD Securities. There is just one hitch. The Fed's overnight reverse repo (RRP) facility, where money market funds park their excess cash, has fallen sharply to $182 billion as of July 11, from a peak of $2.5 trillion in December 2022. Without that excess cash sitting in RRPs, market participants wondered how money funds would absorb more Treasuries if they are fully invested. In 2023, money funds used that buffer sitting in RRPs to buy a deluge of T-bills in the market. In a reverse repo, investors lend overnight cash to the Fed at a 4.25% interest rate in exchange for Treasuries or other government securities, with a pledge to buy them back. The Fed's ongoing quantitative tightening, a process that shrinks its balance, allowed Treasuries and mortgage-backed securities to mature without reinvestment. That drained liquidity from the financial system and reduced excess cash that previously flowed into RRPs. Analysts, however, said money market funds will likely reallocate out of regular repos into T-bills. Repos have grown to 37% of money funds' assets, J.P. Morgan said in a research note. "The overall portion of money fund investments in the repo market is still quite large, so it becomes more of a decision of going out of that normal repo transaction into Treasury bills if the value is there," said Hill of Federated Hermes. Currently, three-month T-bills are yielding 4.353% , higher than the Secured Overnight Financing Rate, a repo rate, of 4.31%. Analysts also pointed to money market funds' continued appeal to investors that should further propel the growth in their assets, which means more cash for T-bills. Money market yields are 170 basis points higher than bank deposits, a historically wide spread, wrote Samuel Earl, U.S. rates strategist at Barclays. Households, which have $10 trillion in time deposits and savings accounts, are likely to continue to move deposits at banks into money funds, he added.
Yahoo
09-07-2025
- Business
- Yahoo
Treasury's Cash Rebuild After Debt-Ceiling Hike Will Be Different Than 2023
(Bloomberg) -- Now that Congress has lifted the US debt ceiling, the Treasury is preparing to replenish its cash buffer, though it likely won't need to raise as much as it did in 2023. Are Tourists Ruining Europe? How Locals Are Pushing Back Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals Trump's Gilded Design Style May Be Gaudy. But Don't Call it 'Rococo.' Denver City Hall Takes a Page From NASA In California, Pro-Housing 'Abundance' Fans Rewrite an Environmental Landmark Wrightson ICAP expects the Treasury to issue roughly $450 billion in net bills during the third quarter — far below the $1.1 trillion issued in the same period two years ago, following the suspension of the debt ceiling in June 2023. Front-end investors will be closely monitoring the Treasury's efforts to rebuild its cash balance at the Federal Reserve, as the influx of new bills is expected to drive yields higher across a range of instruments, from Treasury-backed repurchase agreements to agency debt. More broadly, market participants will be watching for signs of disruption, as the rising Treasury cash balance draws excess liquidity out of the financial system, potentially prompting the Federal Reserve to intervene if bank reserves fall too sharply. Indeed, Wall Street strategists are advising trades that anticipate mounting funding market pressures, as term repo rates in the one- to three-month sector climbed last week. 'The bill supply rebound in the third quarter will pale in comparison to the flood of issuance following the end of the last debt ceiling episode in June 2023,' Wrightson ICAP senior economist Lou Crandall wrote in a note to clients Monday. Wrightson attributes the shift in bill supply dynamics to three main differences from 2023. First, regular coupon issuance was far lower then, just $200 billion, versus $467 billion projected for the current period. Second, borrowing needs were elevated last time around as the Fed was letting $60 billion of Treasuries roll off monthly as part of its balance sheet unwind. Today, the Treasury only needs to finance about $5 billion a month in redemptions. Lastly, when Congress resolved the debt ceiling in 2023, the government's cash balance had dwindled to just $23 billion, creating a heightened sense of urgency to replenish the Treasury General Account. In contrast, as of July 2, the Treasury's cash balance stood at $372 billion, according to the latest data. 'Thanks to those three factors, the Treasury is in a much stronger cash flow position this summer than was the case in June 2023,' Crandall wrote. Wrightson projects that the Treasury's cash balance will return to its typical range of $800 billion to $850 billion by October. While this would represent a meaningful drain on bank reserves by that point, the impact is expected to be limited in the near term, given that reserves currently stand at approximately $3.26 trillion, according to the latest Federal Reserve data. While Wrightson doesn't anticipate an immediate effect on the federal funds rate from the decline in reserves, considerable uncertainty surrounds the forecast — particularly if demand for reserves turns out to be stronger than expected. In that case, Federal Reserve policymakers may need to transition from quantitative tightening to the so-called 'portfolio maintenance' phase, halting the Treasury runoff and reinvesting mortgage-backed security proceeds into government debt. 'We currently expect that transition to take place in the early part of next year, but the Fed would not hesitate to accelerate the timetable if the projected contraction in reserve balances in September and October creates visible frictions in the overnight market,' Crandall wrote. SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too 'Telecom Is the New Tequila': Behind the Celebrity Wireless Boom For Brazil's Criminals, Coffee Beans Are the Target Sperm Freezing Is a New Hot Market for Startups Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
