# As Rates Rise, Stablecoins and Tokenized Treasuries Become Crypto’s Winners As U.S. Treasury yields rise, pressure increases on Bitcoin and other non-yielding assets, while the stablecoin economy benefits differently. Stablecoin issuers hold much of their reserves in U.S. Treasuries and repo, generating income while rates remain high. ## Tether’s 1.5B $ Interest-Backed Profit Tether reported about **1.5B $ in net operating profit** in Q2,with much of it from Treasuries and repo. **While Bitcoin pays no interest, some of crypto’s largest dollar-based instruments earn income from high rates.** ## Circle’s USDC Supply Reaches 73.3B $ Circle reported **701M $ in revenue and reserve income**,while USDC supply reached **73.3B $**. Stablecoin growth depends on both interest income and the amount of tokens in circulation. ## Tokenized U.S. Treasuries Surge The tokenized U.S. Treasury market grew from about **300M $** in 2023 to more than **9B $** by the end of 2025 and reached about **15B $** in August. This shows stronger demand for blockchain-based dollar yield. ## Bitcoin Faces a Different Picture Higher Treasury yields can reduce Bitcoin’s relative appeal: **higher discount rates → tighter financial conditions → lower risk appetite → pressure on Bitcoin and high-beta crypto** Thus, high rates create a mixed crypto picture: **negative for Bitcoin, positive for stablecoin issuers and supportive for tokenization.** ## “Yield” Could Become Crypto’s Next Growth Area Stablecoins, tokenized Treasuries and on-chain money-market products are bringing yield-generating traditional assets onto blockchain infrastructure. The key question may be: **How quickly will trillions of dollars in traditional yield-generating assets be tokenized on blockchain?** If this accelerates, the high-rate era could mark not only a liquidity squeeze for crypto, but the start of a new growth cycle for **stablecoins,tokenization and blockchain-based financial infrastructure.** $BTC