CCData estimates stablecoins will lose approximately $625 million in interest income for each 50-basis point cut. Further cuts in 2024 could reduce annual revenue by as much as $1.5 billion.
The Federal Reserve’s recent decision to cut interest rates for the first time since March 2020 is set to significantly impact the revenue streams of the top five centralized stablecoins, which collectively hold nearly $125 billion in US treasury bills.
According to a report released by index provider CCData on Sept. 27, treasury bills account for 80.2% of major stablecoin reserves. These stablecoins stand to lose approximately $625 million in interest income for each 50-basis point (bps) cut.
Data from CME Group’s FedWatch tool shows that markets are pricing in a 75-bps rate cut by the end of 2024, including a 50-bps cut in November, followed by an additional 25 bps in December.
