Standard Chartered analysts said stablecoins could hit $2 trillion in supply by 2028, pushing $1.6 trillion in new demand toward U.S. Treasury bills if Donald Trump signs off on new crypto rules this summer.
Right now, the total market cap for stablecoins is about $230 billion, and most of that is backed by short-term government debt like T-bills.
Geoff Kendrick, a London-based analyst at StanChart, said this kind of legal clarity would be the thing that flips the switch. His numbers show a $400 billion per year surge in demand for T-bills over four years — that’s the full span of a second Trump term. And that much buying could soak up all of the new short-term debt the government plans to issue in that period.
“Rising demand for USD-denominated stablecoin reserves would create additional demand for USD,” Kendrick said in his research note.
New bills will get eaten by stablecoin reserves
Kendrick said these inflows won’t just be a side effect. This would make stablecoins the biggest buyer group for U.S. Treasurys, period. He said even foreign buyers after Covid didn’t hit that level, and they were spreading their demand across T-bills, notes, and bonds.
In contrast, stablecoins are laser-focused on short-term debt, because it fits their structure — it’s safe, it’s dollar-based, and it gives them liquidity without locking up capital too long.
“The industry could well account for the largest buying flow of any sector across all U.S. Treasuries,” Kendrick wrote in a 9-page report last Tuesday.
This matters because stablecoin issuers use Treasury bills as reserves. It’s not a preference — it’s a necessity. These crypto tokens need backing that matches their promise of being “stable.” Most are pegged to the U.S. dollar, and the only way to back that promise without relying on junk is by parking money into short-term government debt.
And that demand helps the dollar hold its ground globally. Kendrick said this kind of move could offset current threats to dollar dominance, especially those coming from tariffs and growing trade tensions that have put pressure on the greenback’s value.
“It should further entrench USD dominance of stablecoins, which is likely to be sticky given strong network effects in digital assets,” Kendrick said.
Stablecoins aren’t new, but what’s changing is their growth speed and the regulatory momentum behind them. Their market cap has already jumped 11% this year, and about 47% over the past 12 months, with Tether and USD Coin still holding the top spots.
The GENIUS Act, cleared by the Senate Banking Committee in March, and the STABLE Act, passed by the House Financial Services Committee earlier this month, are the two bills that matter here. Both are focused specifically on stablecoin regulation. The bet is that if Trump returns and signs them into law, the legal fog lifts, and big players start scaling fast.
“If stablecoins make the USD even easier to use, demand for USD assets to back stablecoins is likely to increase,” Kendrick said.
“The strength of network effects in digital assets suggests that USD dominance, once cemented further, will be difficult to usurp,” he wrote. “The holy grail of international finance is finding an alternative to the USD that offers the same flexibility and liquidity as the USD.”
But ironically, Kendrick’s report shows stablecoin growth might just make the dollar even more dominant. The deeper these assets dig into DeFi and payments, the more USD reserves they’ll need. And as long as most of them are backed by T-bills, they’ll keep feeding that short-term debt machine.
