Zhu Su, co-founder of bankrupt crypto hedge fund Three Arrows Capital and founder of OPNX, has predicted that a U.S. debt crisis could push corporate bond issuance onto blockchain networks while sharply reducing demand for stablecoins.
In a recent post on X, Zhu argued that if the dollar begins losing value rapidly, investors would have little reason to hold stablecoins yielding 0%, and would instead prefer assets such as Apple corporate bonds offering around 6% yield. He added that companies could move bond issuance on-chain to raise funds more cheaply from dollar-holding investors, leading to a significant decline in overall stablecoin demand.
Why it matters: Zhu's scenario links macroeconomic stress to decentralized finance. Tokenized bonds have already gained some traction: the European Investment Bank issued a digital bond on a blockchain in 2023, and asset managers have explored tokenized money market funds. However, regulatory uncertainty and infrastructure gaps remain.
Stablecoins such as USDT and USDC are widely used for trading and as a store of value within crypto, but they typically offer no yield. If the dollar weakens sharply, holding dollar-pegged stablecoins would erode purchasing power, pushing investors toward yield-bearing tokenized assets like corporate bonds.
Potential ecosystem impact: Companies seeking cheaper funding might bypass traditional intermediaries and issue bonds directly on-chain, potentially democratizing debt markets but raising investor protection and compliance questions. Stablecoin issuers may respond with yield-bearing products, though these face regulatory hurdles in jurisdictions like the U.S.
Zhu Su remains a polarizing figure following the 2022 collapse of Three Arrows Capital amid the Terra-Luna crash, but his macro-level arguments continue to resonate with market participants watching U.S. fiscal policy.
