JPMorgan reported that tokenized treasuries, such as Blackrock's BUIDL, will challenge existing stablecoins but are unlikely to fully replace them. This is primarily because stablecoins enjoy a regulatory advantage, being classified as traditional currencies rather than securities. Consequently, they face fewer restrictions, allowing them to serve as widely used collateral in the crypto ecosystem. While tokenized treasuries may gradually absorb some idle cash currently held in stablecoins, it is estimated that this will only impact a small fraction of the stablecoin market. The research emphasized that stablecoins currently hold a significant liquidity edge, with a vast market totaling nearly $180 billion, enabling low transaction fees and seamless trading experiences. In contrast, the liquidity of tokenized treasuries remains relatively limited, although this may improve as their popularity grows. Overall, while tokenized treasuries could diversify the landscape, their integration will not completely diminish the role of stablecoins, which continue to dominate the market due to their established advantages.

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