Daniel Walker
The global stablecoin market could expand nearly tenfold, reaching $2 trillion by the end of 2028, according to a new report by Standard Chartered Bank. Analysts attribute the projected surge in part to upcoming U.S. legislation, which is expected to establish a formal regulatory framework for the digital dollar-pegged assets.
The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, recently passed by the Senate Banking Committee, is anticipated to become law as early as this summer. If enacted, the bill could usher in a new era of legitimacy and utility for stablecoins.
โWe expect the total supply to rise from $230 billion today to $2 trillion by 2028,โ wrote Geoffrey Kendrick, Standard Charteredโs Global Head of Digital Assets Research.
Trillions in U.S. Treasuries Could Be Absorbed by Stablecoin Reserves
As stablecoin supply grows, issuers will likely increase their holdings of short-term U.S. Treasuries, driving demand for government debt. The analysts estimate that $1.6 trillion worth of Treasury bills could be absorbed over the next four years, averaging around $400 billion per year.
โThis demand could represent the largest single sector inflow into U.S. Treasuries, rivaling that of foreign institutions post-COVID,โ the report stated.
This uptick in demand would also complement President Donald Trumpโs second-term fiscal strategy, as stablecoin issuers could potentially absorb all projected T-bill issuance.
Circle’s Reserve Strategy May Become the Industry Standard
The report also highlights Circleโs conservative reserve model as the likely blueprint for future stablecoin issuers. Circle currently holds 88% of its USDC reserves in short-dated U.S. government bonds, with an average maturity of just 12 days.
With the GENIUS Act expected to cap reserve durations at 93 days, Circle’s approach aligns closely with regulatory guidance and market preferences.
โAssuming wide adoption of this model, stablecoin issuers could collectively hold $1.75 trillion in Treasuries by 2028, up from approximately $150 billion today,โ Kendrickโs team noted.
Stablecoins Could Reinforce U.S. Dollar Dominance
A surge in USD-backed stablecoin circulation would also strengthen dollar hegemony, bolstering the greenbackโs position as the worldโs primary currency for trade and settlement. This is especially relevant as geopolitical tensions and de-dollarization narratives continue to develop.
โStablecoin growth could increase demand for U.S. dollars, enhancing liquidity and reinforcing global confidence in USD-denominated assets,โ the report said.
However, Standard Chartered also warned of a long-term risk: if the industry begins favoring non-USD stablecoins โ or diversified baskets tied to multiple fiat currencies โ the dollarโs dominance could erode over time.
Could a Global Stablecoin Basket Rival the Dollar?
The analysts drew a parallel to the IMFโs Special Drawing Rights (SDR), noting that while SDRs never gained mainstream traction, a flexible and liquid multi-currency stablecoin could eventually appeal to sovereign reserve managers, especially if digital asset reserves become standard practice.
โA diversified stablecoin basket could emerge as a viable alternative for cross-border reserves,โ they suggested, signaling a possible shift in how digital currencies are held and used globally.
