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Tokenizing US Treasuries pitched as a response to bond redemption concerns

The discussion followed Kevin Warsh’s Jackson Hole speech, during which US dollar and Treasury yields rose and other assets faced pressure, according to market experts quoted by LiveMint.

Reported · Written up by our desk · Central Banks

Kevin Warsh’s Jackson Hole speech prompted a move higher in US Treasury yields and the US dollar, which in turn pressured other assets including equities, gold, silver, bitcoin and other cryptocurrencies, according to LiveMint Markets.

LiveMint Markets also cited market experts who said the US central bank is working on tokenising its Treasuries to address a perceived bond redemption challenge, while also aiming to keep the US dollar dominant in global trade.

The report, quoting Basav Capital co-founder Sandeep Pandey, linked the policy debate to concerns that some countries have been converting bonds into physical gold, potentially creating redemption pressure for the US administration.

LiveMint Markets said Pandey expects investors from emerging economies could treat tokenised Treasuries as an opportunity, including using the bonds as leverage for loans at lower interest rates, and argued that tokenisation would support demand for the US dollar as short term yields rise.

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