#149 - Stablecoins and U.S. Treasuries: A Risky Interdependence (with Yesha Yadav & Brendan Malone)

Law of Code

Stablecoins have grown from a total value of ~$2 billion in 2019 to over $230 billion by early 2025, enabling $33 trillion in transactions across 236 million wallets.

But beneath this growth lies a deep — and fragile — dependence on the U.S. Treasury market.

Professor Yesha Yadav of Vanderbilt Law School and Brendan Malone, formerly of Paradigm, the Federal Reserve Board, and MIT, discuss their paper on the critical but underexamined relationship between U.S. dollar stablecoins and Treasuries.

They unpack why Treasuries act as the “anchor” for stablecoins, explore operational and liquidity risks, and outline what policy changes might be necessary to avert a crisis.

Timestamps:

➡️ 00:00 — Intro

➡️ 01:10 — Sponsor: Hedera Council is hiring a legal counsel

➡️ 02:40 — Why is the U.S. Treasury market so critical to stablecoins?

➡️ 04:32 — Treasuries as “cash equivalents” and risk-free assets

➡️ 07:33 — What does it mean to “hold” Treasuries?

➡️ 11:38 — Liquidity and operational risks

➡️ 14:34 — Changing structure of Treasury markets

➡️ 16:12 — 24/7 crypto vs. limited-hour Treasury markets

➡️ 20:06 — Systemic risk scenarios

➡️ 28:27 — The urgent need for preemptive policy solutions

➡️ 33:22 — Regulatory fragmentation: “everyone’s responsible, so no one is”

➡️ 38:51 — Possible reforms: more short-term issuance, repo market, reserves access

➡️ 40:53 — Treasuries as “risk-free” assets — myth vs. reality

➡️ 46:23 — Potential Fed facilities and why they aren’t in place yet

➡️ 51:06 — Bonus: Hedera Council’s General Counsel Gregory Schneider on their open position.

Sponsor: Hedera Council is hiring a legal counsel. Click here for more information about the role, or follow this link: https://hedera.com/future?gh_jid=4574329006.

Jacob Robinson and his guests are not your lawyer. Nothing herein or mentioned on the Law of Code podcast should be construed as legal advice. The material published is intended for informational, educational, and entertainment purposes only. Please seek the advice of counsel, and do not apply any of the generalized material to your individual facts or circumstances without speaking to an attorney.