The US Treasury Department has recognized Bitcoin as a “digital gold”, emphasizing its primary role as a store of value.
At the same time, the Treasury also highlighted the growing importance of stablecoins, which are driving demand for government bonds in a changing financial landscape.
Ministry of Finance Recognizes Bitcoin and Stablecoins
The Treasury report highlights the rapid expansion of digital assets, including Bitcoin, Ethereum and stablecoins, but notes that the market remains small compared to traditional financial instruments such as bonds US government.
“Bitcoin’s primary use appears to be as a store of value, known as ‘digital gold’ in the DeFi (DeFi) world,” the Treasury Department stated.
The financial manager noted that Bitcoin has established itself as a store of value similar to gold. According to the report, Bitcoin’s market value increased from $6.4 billion in 2015 to $134 billion in 2019 and reached about $1.3 trillion in 2024. This development reflects growing interest in Bitcoin. There is growing interest in DeFi (DeFi) and digital tokens.
Indeed, the report comes amid growing comparisons of Bitcoin to gold, including recent comments from Federal Reserve Chairman Jerome Powell. This has reinforced optimism in the Cryptocurrency market, where Bitcoin is seen as a key component of the financial future.
However, the US Treasury Department notes that the majority of people engage in Cryptocurrencies as speculative investments, seeking future increases in value. Therefore, digital currencies have not yet replaced traditional assets such as government bonds, which are still popular.
“Structural demand for bonds may increase as digital asset market values grow, both as insurance against price volatility and as an ‘on-chain’ safe haven asset ‘,” the Ministry of Finance stated.
To clarify, the Treasury Department’s report highlights the rapid growth of stablecoins and their growing role in the Cryptocurrency ecosystem. More than 80% of all Cryptocurrency transactions involve stablecoins, the main intermediaries in digital markets.
Providers of fiat-pegged stablecoins, such as Tether, rely heavily on US government bonds and other government-backed assets as collateral. These holdings account for about $120 billion in US government bonds. As the stablecoin market grows, demand for government securities is expected to increase. This will be driven by their use as insurance against price volatility and as a safety asset in blockchain networks.
Overall, the Treasury Department’s embrace of Bitcoin and stablecoins signals a growing intersection between traditional finance and blockchain-based innovations. Although the department maintains a cautious stance, its recognition of digital assets shows a willingness to explore their potential.