I recently got pitched stablecoins as a way to lower government borrowing costs. I’m sort of on board with this.

If I am investing $1mm of my own money, I care about the yield. If I’m investing $1mm of someone else’s money, and I don’t need to pay them a return, I mostly care about never losing it. This creates price-insensitive demand for safe assets. If you require those safe assets be government bonds, you’ve created pools of price-insensitive demand for your government’s debt.

Put another way, we’re financing our deficits with crypto bros. Compared with taxation, that seems like a win-win.

As with so many bits of crypto, I have to ask: who's taking the other side of this trade? Who wants their money held with no yield when they could have yield?

How is it “instead of”?