Core Insights - The emergence of "on-chain debt" in the U.S. signifies a shift in the country's debt output strategy, leveraging blockchain technology to tokenize U.S. Treasury products, which have surged from under $1.3 billion to over $7 billion recently [1][3] - The rapid growth of stablecoins, particularly Tether's USDT, which has become a significant buyer of U.S. debt, indicates a new phase in the U.S. financial hegemony and raises concerns about the global financial order [1][5] Group 1: On-Chain U.S. Debt Growth - The market for tokenized U.S. Treasury bonds reached a new high of $7.45 billion by late August 2023, up from less than $1.3 billion in mid-2022 [3] - Asset tokenization, particularly of U.S. Treasuries, is seen as a bridge between traditional finance and decentralized finance, with major firms like BlackRock launching tokenized funds [3][6] - The U.S. Senate's passage of the "Genius Act" in June 2023 aims to regulate stablecoins, further integrating them into the financial system [5] Group 2: Role of Stablecoins - Tether's USDT, with a market cap nearing $150 billion, and Circle's USD Coin, exceeding $60 billion, have significant portions of their reserves invested in U.S. Treasuries [5][6] - Tether became the seventh largest foreign buyer of U.S. debt in 2024, net purchasing $33.1 billion, highlighting the growing influence of stablecoins in U.S. debt markets [5][6] Group 3: Implications for Global Financial Order - The rise of "on-chain debt" reflects a transformation in U.S. debt distribution, utilizing blockchain as an efficient infrastructure for global financing [6][8] - The integration of stablecoins as collateral in on-chain lending and their increasing use as a benchmark for interest rates may reinforce the dollar's dominance [7][8] - The "Genius Act" could lead to a rapid rise in decentralized payment activities, potentially disrupting existing global payment systems [8]