On April 11, 2025, the U.S. Treasury Department announced plans to consult with primary dealers on two significant issues: potential revisions to the 20-year bond auction schedule and the role of stablecoins in Treasury markets. These consultations, scheduled for April 24–25, aim to gather insights that will inform the Treasury's May refunding announcement.

The Treasury is considering shortening the when-issued period for 20-year bonds, including Treasury Inflation-Protected Securities (TIPS). Currently, the auction schedule involves a mid-month announcement, mid-month dated date, and end-of-month settlement, resulting in a longer when-issued period compared to other Treasury securities. Aligning this period with that of other securities could enhance market efficiency and liquidity.

In addition to auction schedule revisions, the Treasury seeks input on the potential demand for U.S. government debt as reserve assets by stablecoin issuers. Stablecoins are cryptocurrencies pegged to fiat currencies, such as the U.S. dollar, and are commonly used to facilitate transactions between different tokens. This inquiry comes amid recent legislative efforts to establish a regulatory framework for stablecoins.

In February 2025, a bipartisan group of senators introduced the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The bill defines a payment stablecoin as a digital asset used for payment or settlement that is pegged to a fixed monetary value. It establishes clear procedures for institutions seeking licenses to issue stablecoins and implements reserve requirements and tailored regulatory standards for issuers. For issuers with more than $10 billion in market capitalization, the bill applies the Federal Reserve's regulatory framework to depository institutions and the Office of the Comptroller of the Currency's framework for nonbank issuers. It also allows for state regulation of issuers under $10 billion in market capitalization and provides a waiver process for issuers exceeding the threshold to remain state-regulated. The GENIUS Act has garnered bipartisan support, with Senator Kirsten Gillibrand stating, "Passing clear and sensible regulations for stablecoins is critical to maintaining U.S. dollar dominance, promoting responsible innovation, and protecting consumers." Gillibrand Senate

In the House of Representatives, the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act has been introduced. This legislation aims to regulate stablecoin issuers and includes provisions to prevent their use by malicious actors. During a recent hearing, legislators discussed the necessity of including measures to prevent stablecoins from being used for illicit activities. Some witnesses emphasized the importance of adhering to the Bank Secrecy Act to ensure compliance with anti-money laundering regulations. Axios

The Treasury's engagement with primary dealers on these matters reflects a proactive approach to adapting to evolving financial landscapes. Shortening the when-issued period for 20-year bonds could lead to more accurate pricing and reduced volatility, benefiting investors and the broader financial market. Furthermore, understanding the role of stablecoins in Treasury markets is crucial as these digital assets continue to grow in prominence.

The upcoming consultations are poised to influence future policies and market practices, highlighting the intersection of traditional finance and emerging digital assets. As the Treasury gathers insights from primary dealers, the financial community will be closely watching for developments that could shape the future of bond auctions and the integration of stablecoins into the financial system.