Why can stablecoins leverage so much capital flow? Ultimately, it comes down to mechanism design.

Take USDT as an example. It claims that for every token issued, there is $1 in assets backing it—sounds stable, but the problem is, that $1 is usually converted into US Treasury bonds. In other words, when users exchange dollars for USDT, that money ultimately flows into the US Treasury market. From a macro perspective, this is a real capital outflow, and on a considerable scale. For certain economies, this kind of flow clearly goes against the original intent of their financial policies.

What's even more interesting is Tether's business logic itself. As one of the world's largest stablecoin issuers, Tether holds a huge amount of US Treasuries. And Treasuries generate returns—federal funds rates, treasury yields, these are not just for show. This means Tether can earn interest income from Treasuries every year. Issuing stablecoins, holding Treasuries, earning interest—this closed loop is almost a stable cash flow.

It’s precisely because of the allure of this model that more and more projects are entering the stablecoin track. There’s yield, market demand, and relatively controllable risks—at least on paper. But the capital flows and financial impacts behind this aren’t something every country is willing to accept by default.