According to CoinMeta, the reason why stablecoin issuers pay attention to Treasury bond yields is that most of the funds supporting USDT and USDC are invested in short-term U.S. Treasury bonds. Higher yields increase the interest income from these reserves, while Federal Reserve rate cuts reduce per-dollar earnings. For major issuers such as Tether and Circle, a 1-percentage-point change in yield can translate into hundreds of millions or even billions of dollars in annual revenue, making interest rates an important component of the stablecoin business model. Stablecoins typically promise users that they can redeem a token for about $1. To fulfill this promise, issuers maintain reserves of cash and highly liquid assets. Short-term Treasury bonds combine liquidity, low credit risk, and interest income. For example, a stablecoin issuer with reserves generated from $100 billion in bonds, assuming an average yield of 5%, can generate approximately $5 billion in total interest annually. If the yield drops to 4%, it reduces to $4 billion; if it drops to 3%, it reduces to $3 billion. Changes in short-term interest rates can significantly affect the issuer's finances. Stablecoin holders generally do not receive the benefits of Treasury bond yields; what they hold are digital dollars designed to remain around $1, while issuers earn income from supporting these assets.