Standard Chartered: “Stablecoins could generate $1tn in demand for U.S. Treasuries by 2028”

An analysis suggests that stablecoin issuers could emerge as major buyers of U.S. short-term Treasury securities (T-bills) in the coming years, potentially reshaping the Treasury Department’s issuance mix.

According to U.S. digital-asset (cryptocurrency) outlet The Block on the 23rd, Standard Chartered said in a recent report that stablecoins’ market capitalization is expected to reach $2tn by the end of 2028. In that case, it projected that new demand for short-term Treasuries could total about $800bn to $1tn.

The report said stablecoin issuers are likely to concentrate demand at the 0–3 month part of the curve by allocating large amounts of short-dated U.S. Treasuries as reserve assets. This is because, under the “GENIUS Act” enacted in July 2025, regulated stablecoin issuers in the United States are required to hold highly liquid assets.

Stablecoin supply currently stands at about $300bn, with growth slowing amid a recent pullback in digital-asset prices and delays in the launch of new regulated products. Standard Chartered, however, viewed this as a cyclical adjustment rather than a structural contraction.

The report estimated that total new demand for short-term Treasuries through 2028 could reach about $2.2tn. The figure reflects not only stablecoin growth but also the Federal Reserve’s purchases of short-dated securities and demand related to rolling over maturing assets. By contrast, net supply of short-term Treasuries over the same period is projected at about $1.3tn, implying demand could exceed supply by roughly $900bn.

If such an imbalance materializes, it raises the possibility that the Treasury could adjust by reducing long-term issuance and increasing the share of bills. The report noted that if about $900bn of long-term issuance were shifted into short-term securities, it could theoretically leave room to halt 30-year Treasury auctions for up to three years.

Even so, Standard Chartered’s base case is for “bear steepening” over the next year, with long-term rates rising and the yield curve steepening. It also warned that market volatility could increase if pressure in the short-end supply-demand balance becomes acute.

Meanwhile, Tether, issuer of USDT, currently has about $185bn of stablecoins in circulation and is known to hold more than $120bn in short-term U.S. Treasuries—an amount that ranks among the world’s largest holders of U.S. T-bills.

The report also said stablecoin growth could drive as much as $500bn of U.S. bank deposits to migrate into government debt markets by 2028, suggesting stablecoins’ impact on the macro-financial market structure is increasingly expanding.