Standard Chartered Projects Stablecoins to Generate $1 Trillion in US Treasury Demand by 2028

Standard Chartered Bank projects that stablecoin issuers will generate between $800 billion and $1 trillion in new demand for US Treasury bills by the end of 2028, driven by an expected expansion of the stablecoin market capitalization to $2 trillion, according to a research report from analysts Geoffrey Kendrick and John Davies. The analysis indicates that this structural demand, concentrated in the 0-3 month sector of the yield curve due to reserve requirements under the GENIUS Act regulatory framework, could create approximately $900 billion in excess T-bill demand over three years unless the US Treasury adjusts its issuance composition.

Stablecoin T-Bill Demand Projections

Standard Chartered’s analysis projects the total stablecoin market capitalization will reach $2 trillion by the end of 2028, up from approximately $300–$309 billion currently. This expansion is expected to generate $0.8 trillion to $1.0 trillion in fresh demand for US Treasury bills, as issuers accumulate short-dated government securities as reserve assets.

When combined with an estimated $500–$600 billion in Federal Reserve purchases via Reserve Management Purchases and a similar amount from reinvesting maturing mortgage-backed securities, total new T-bill demand could reach approximately $2.2 trillion through 2028. This compares with roughly $1.3 trillion in projected net T-bill supply over the same period if the bill share of outstanding debt remains constant, potentially creating a $0.9 trillion supply shortfall.

Regulatory Framework Driving Demand

The GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins Act), signed into law in July 2025, establishes federal regulatory requirements that directly shape stablecoin reserve composition. Under the framework, permitted payment stablecoin issuers must maintain reserves on at least a 1:1 basis in high-quality liquid assets, including demand deposits, Treasury bills, and money market funds.

Stablecoin issuers are subject to monthly public reporting requirements and audits by registered public accounting firms regarding reserve composition. The legislation designates stablecoins as neither securities nor commodities under federal law, placing them under specialized regulatory oversight rather than SEC or CFTC jurisdiction.

The Federal Deposit Insurance Corporation issued a proposed rulemaking in December 2025 to implement section 5 of the GENIUS Act, establishing application procedures for subsidiaries of insured depository institutions seeking to become permitted payment stablecoin issuers.

Emerging Markets as Primary Growth Driver

Standard Chartered estimates that two-thirds of the projected $2 trillion stablecoin market capitalization by 2028 will originate from emerging markets, representing net new capital inflows rather than replacement of existing Treasury allocations. Growth in developed markets is expected to partially substitute for existing holdings rather than generate incremental demand.

The analysis suggests that approximately $500 billion in deposits from emerging markets could shift from traditional banks into stablecoins by 2028, with corresponding reserve requirements flowing into US government debt. This dynamic creates structural demand for dollar-denominated assets from users in high-inflation countries seeking stable stores of value.

Treasury Issuance Implications

The projected excess demand for T-bills could provide the US Treasury with flexibility to adjust its debt issuance composition. Treasury Secretary Scott Bessent has indicated that the GENIUS Act could become “an important feature of financing the U.S. government,” while the Treasury’s February Quarterly Refunding Announcement noted “growing demand for Treasury bills from the private sector”.

T-bills currently account for 21.7% of outstanding marketable debt, above the Treasury Borrowing Advisory Committee’s recommended 15–20% range but below the post-World War II average of 26.1%. Raising the T-bill share by 2.5 percentage points over three years would generate approximately $900 billion in additional bill issuance, potentially offsetting the projected stablecoin-driven excess demand.

Analysts calculate that shifting $900 billion from long-end supply into bills could, under current auction sizes, effectively allow suspension of 30-year bond auctions for three years. The US Treasury previously paused 30-year issuance between 2002 and 2006, though that period featured budget surpluses rather than the current 5–6% deficit levels.

Market Structure Considerations

Stablecoin-related T-bill demand is expected to concentrate in the 0–3 month sector of the yield curve, potentially creating front-end scarcity. The immediate market reaction to increased bill issuance and reduced long-end supply would likely be a bull flattening of the Treasury curve, with long-end yields falling relative to the front end.

However, analysts caution that term premia dynamics, fiscal deficit concerns, and rollover risk could influence yields differently over longer time horizons. Heavier reliance on short-term financing increases rollover exposure and could heighten concerns about fiscal dominance if markets question Federal Reserve independence.

Tether, the largest stablecoin issuer with approximately $185 billion in circulation, holds more than $120 billion in US Treasury bills, positioning it among the top global holders of short-term US government debt.

Broader Implications for US Debt Markets

The analysis highlights the growing macro-financial footprint of stablecoins as they transition from trading tools to structural buyers of government debt. Some market participants suggest the macroeconomic impact may remain limited unless stablecoins achieve significant scale, noting that if stablecoins hold Treasuries as reserves, the macro linkage resembles fiat currency in the banking system—both represent private liquidity choosing safe assets.

However, the scale of projected demand—potentially making stablecoin issuers among the largest buyers of short-term US debt—suggests implications for Treasury yield curve management and government financing strategy. The combination of regulatory requirements mandating high-quality liquid assets and emerging market-driven growth creates structural demand that the Treasury may need to accommodate through issuance adjustments.

Frequently Asked Questions

What is Standard Chartered’s projection for stablecoin-driven Treasury demand?

Standard Chartered projects stablecoin market capitalization will reach $2 trillion by the end of 2028, generating $800 billion to $1 trillion in new demand for US Treasury bills. Combined with Federal Reserve purchases, total short-term Treasury demand could reach $2.2 trillion, potentially creating $900 billion in excess T-bill demand if issuance patterns remain unchanged.

How does the GENIUS Act affect stablecoin reserve requirements?

The GENIUS Act requires stablecoin issuers to maintain reserves on at least a 1:1 basis in high-quality liquid assets, including demand deposits, Treasury bills, and money market funds. Issuers must publish monthly reserve reports subject to audit by registered public accounting firms. The legislation designates stablecoins as neither securities nor commodities under federal law.

Could stablecoin demand lead the US Treasury to suspend 30-year bond auctions?

Standard Chartered analysts suggest that shifting $900 billion from long-end supply into T-bills could effectively allow suspension of 30-year bond auctions for three years under current auction sizes. The Treasury previously paused 30-year issuance from 2002 to 2006, though that period featured budget surpluses rather than current deficit levels.