Standard Chartered Predicts $2T Stablecoin Market by 2028

Standard Chartered forecasts the stablecoin market will reach $2 trillion by 2028, despite temporary slowdowns. This projection underscores the growing integration of digital assets into traditional finance, impacting Treasury bill demand and market dynamics.

Stablecoin Growth and Its Financial Impact

Standard Chartered has maintained its prediction that the stablecoin market will reach $2 trillion by the end of 2028. This comes as the bank adjusts its expectations for short-term U.S. Treasury bill demand. Analysts Geoffrey Kendrick and John Davies noted that while stablecoin growth has recently stagnated, the long-term outlook remains positive. The U.S. dollar stablecoin supply has been stable at around $300 billion, primarily due to weakened crypto markets and the slower introduction of regulated products post-GENIUS Act 2025. However, the bank views these as cyclical issues.

The Role of Treasury Bills in Stablecoin Expansion

The GENIUS Act requires regulated stablecoin issuers to hold high-quality liquid assets, with an emphasis on short-dated Treasurys. This regulation directly links stablecoin growth to Treasury bill demand, particularly for bills maturing within three months. Standard Chartered estimates that stablecoins could create $800 billion to $1 trillion in additional T-bill demand by 2028, a reduction from its earlier projection of $1.6 trillion. Despite this revision, the potential demand remains significant within the context of net bill supply.

Investor Takeaway

Adjusting U.S. Debt Issuance Strategies

The potential for excess demand has prompted discussions on U.S. debt issuance strategies. Treasury Secretary Scott Bessent indicated that the GENIUS Act could play a pivotal role in U.S. government financing. Currently, T-bills account for 21.7% of marketable debt, slightly above recommended levels. Standard Chartered suggests increasing this share by 2.5 percentage points over three years to meet the projected demand shortfall.

Investor Takeaway

Future Outlook for Stablecoins and Treasury Markets

A shift towards greater bill issuance might flatten the yield curve in the short term. However, Standard Chartered anticipates a bear steepening in the next year, with the 10-year yield expected to reach 4.6% by 2026. The reliance on short-term financing could increase rollover risks and affect perceptions of fiscal dominance. Stablecoins, already major T-bill buyers, are expected to further impact front-end funding markets as regulated supply grows.

The stablecoin expansion is projected to redirect up to $500 billion from U.S. bank deposits by 2028, shifting funding from traditional banks to government securities. This transition highlights the evolving relationship between digital assets and public debt markets.

As stablecoins continue to influence financial markets, their role in shaping Treasury demand and market dynamics will be closely monitored by investors and policymakers.