[FabHK]

The bond market is almighty [1], and given that daily volume seems to be around $bn 500 or 600 [2], it seems that it would not be too hard for USDC to unload $bn 50 of treasuries in a fairly short time (despite worries about bond market liquidity [3]).

However, as the article points out, if USDC gave most of the money to a bank (SBNY), then it is not obvious that the bank put it in short term treasuries - the bank could have done the usual thing of putting it into longer term loans ("maturity transformation"). Given that USDC constitutes nearly half of that bank's balance sheet, but cash/cash equivalents less than a third, things could get interesting on the way down.

[1] > In the 1990s, the Democratic political adviser James Carville said: “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.” https://www.bloomberg.com/news/articles/2018-01-29/the-daily...

[2] see eg. https://www.finra.org/filing-reporting/trace/data/trace-trea... (click on a recent weekly report) or https://www.statista.com/statistics/189302/trading-volume-of...

[3] see eg. https://www.bloomberg.com/news/articles/2022-05-24/treasurie... (Note: also a running gag in Matt Levine's Money Stuff column...)