Stablecoin research firm Bluechip has disclosed on the X platform that Tether's annual revenue diminishes significantly by $488 million for every 50 basis points the Federal Reserve reduces interest rates. In a similar vein, Circle's annual revenue experiences a notable decline of $144 million. This phenomenon occurs because when the Federal Reserve lowers interest rates, the income that stablecoin issuers generate from U.S.
Treasury bonds also decreases. Such revenue losses could compel these issuers to explore higher-risk investment options to compensate for the income shortfall. Moreover, Bluechip has provided a screenshot revealing that as of September 22, Circle and Tether together maintain holdings exceeding $125 billion in U.S.
Treasury bonds, highlighting the significant exposure these stablecoin operators have to shifts in federal interest rates and their implications for overall fiscal health..