Stablecoin supply surges to $2T by 2028 after US law, StanChart says
Buckle up, because Standard Chartered is predicting some serious growth in the stablecoin world! They’re forecasting that the total supply could balloon to a whopping $2 trillion by 2028. And if some anticipated US legislation gets the green light, this surge could fuel a massive $1.6 trillion in new demand for good ol’ US Treasury bills.
The report, penned by StanChart’s digital asset guru, Geoffrey Kendrick, highlights the upcoming US GENIUS Act as a potential game-changer. This Act, designed to set clear legal rules for stablecoins, is expected to be nothing short of a massive boost for these digital currencies and their expansion.
Having already sailed through the Senate Banking Committee in March, the bill is widely tipped to become law by summer.
T-Bill Powerhouses
Here’s where it gets interesting: the GENIUS Act isn’t just about regulation. It’s crafting a framework that requires stablecoins to be fully backed by reserves, and it’s heavily leaning towards super-safe US assets like T-bills. Standard Chartered believes this will trigger a steady and significant increase in government debt purchases as the stablecoin market grows.
In Kendrick’s own words:
“That level of demand is enough to absorb all the fresh T-bill issuance planned during Trump’s second term.”
This isn’t just another speculative crypto craze, according to the bank. They see stablecoin demand becoming fundamentally linked to traditional financial markets. Issuers will need to back every stablecoin in circulation with solid, liquid reserves.
It’s important to note that this $1.6 trillion T-bill demand projection only accounts for *newly issued* stablecoins under these new rules. It doesn’t include older stablecoins or the broader digital asset universe.
The report further clarifies that shorter-term T-bills are likely to be the go-to reserve asset. Why? Because they’re perfect for managing liquidity and navigating market ups and downs, helping issuers avoid a tricky “duration mismatch.”
Boosting Dollar hegemony
But there’s more! The report suggests that the rise of well-regulated stablecoins, firmly backed by US dollars, could also strengthen global demand for the greenback. This could be particularly true in countries grappling with shaky currencies or capital controls.
Standard Chartered argues that having access to digital dollars via blockchain technology can expand the dollar’s global reach, all without necessarily needing to rely on traditional banks.
Kendrick also points out that this fresh way of “exporting” dollars could provide a “medium-term offset against the current threat to USD hegemony,” especially given the increasing trade barriers and fragmentation in the global monetary system.
With this legislation poised to bring stablecoins deeper into the US financial fold, their role could evolve from a niche crypto tool into a vital part of global dollar liquidity and fiscal support.
