Treasury stablecoin is not a defined legal category. The phrase is used in two ways. Most often it describes a stablecoin pegged to the US dollar whose stablecoin reserves consist largely of short-dated Treasury bills and similar government-backed instruments, as opposed to bank deposits, commercial paper or crypto collateral. The largest dollar stablecoins are now backed this way, and United States law enacted in 2025 limits the reserves of licensed payment stablecoin issuers to assets of this kind.
The second use refers to stablecoins held and moved by a company's finance team as part of blockchain treasury management, for example to settle with overseas partners outside banking hours. Neither sense should be confused with a tokenized money market fund or other tokenized Treasury product. Those are investment securities that pass yield to the holder, whereas the interest on a payment stablecoin's reserves is normally kept by the issuer.