Standard Chartered Bank predicts that the stablecoin market capitalization will reach $2 trillion by 2028. How will this impact U.S. Treasury bonds?

Recently, a major prediction has emerged at the intersection of traditional finance giants and the crypto world. Standard Chartered Bank released a new research report stating that as digital assets become more widespread, issuers of stablecoins are expected to become one of the most important buyers in the U.S. Treasury market. The bank’s analysts forecast that by the end of 2028, the global stablecoin market cap will reach an astonishing $2 trillion, generating approximately $1 trillion in additional demand for U.S. Treasuries. This view has sparked widespread discussion among crypto investors and traditional financial market participants.

The $2 Trillion Foundation: Explosive Growth of Stablecoins

Standard Chartered’s analysis team, led by Global Digital Asset Research Head Geoffrey Kendrick and U.S. Rate Strategist John Davies, notes that although the stablecoin market has temporarily slowed due to cryptocurrency price volatility and regulatory rollout, this is a cyclical rather than structural issue. They firmly believe that by the end of 2028, the total market cap of stablecoins will surpass $2 trillion.

According to data from Gate.io, as of February 24, 2026, the current stablecoin market cap is approximately $324 billion. This means that over the next two years, this sector could see more than a sixfold increase. The driving forces behind this growth are not only the demand for crypto trading itself but also the widespread use of stablecoins in payments, cross-border settlements, and on-chain finance.

Trillions of Dollars Flow In: A New Demand Source for the U.S. Treasury Market

If stablecoin market cap reaches $2 trillion as expected, where will this capital go? The report provides a clear answer: U.S. Treasuries, especially short-term T-bills.

Stablecoin issuers (such as Tether and Circle) must hold highly liquid, low-risk reserve assets to maintain their 1:1 peg to the dollar. U.S. Treasuries, particularly short-term bonds, have always been the preferred choice. The report indicates that as stablecoin supply expands, issuers will accumulate more short-term government bonds as reserves, which will bring an additional demand of about $800 billion to $1 trillion to the U.S. Treasury market in the coming years.

This influx of demand will position stablecoin issuers as “Treasury whales,” comparable to large sovereign nations. For example, Tether’s holdings of U.S. Treasuries already exceed those of many medium-sized countries. Data from Gate.io shows that USDT’s market cap remains stable above $141 billion, maintaining its industry-leading position.

Chain Reaction in the U.S. Treasury Market: Supply-Demand Imbalance and Maturity Structure Adjustment

A trillion-dollar influx of funds is no small matter; it could have profound impacts on U.S. government financing.

1. Significant Demand Gap

Standard Chartered’s analysis states that combining the additional demand from stablecoins (around $1 trillion) with the Federal Reserve’s bond-buying plans (about $1.2 trillion), total short-term debt demand could reach approximately $2.2 trillion by 2028. However, at current issuance levels, the market can only provide about $1.3 trillion in net new supply during the same period, creating a potential demand shortfall of up to $900 billion.

2. Possible Adjustment in Debt Issuance Structure

Faced with such a massive demand for short-term debt, the U.S. Treasury might seize this historic opportunity to adjust its debt structure. Standard Chartered predicts that Treasury Secretary Scott Bessent could leverage this demand to increase the proportion of short-term T-bills in the overall debt portfolio. Specifically, if the share of T-bills is increased by 2.5% over the next three years, it could release about $900 billion in additional supply, helping to fill the demand gap created by stablecoins.

3. Changes in Long-Term Bond Supply

To boost short-term bond issuance, the Treasury might reduce long-term bond issuance accordingly. Standard Chartered even hypothesizes that if demand for short-term bonds remains strong, the Treasury may have to cut or temporarily suspend auctions of 30-year bonds. This would significantly alter the shape of the U.S. yield curve, potentially pushing long-term yields higher while short-term yields remain stable due to strong demand.

Current Market Status and Future Outlook

While the prospects are promising, the path to $2 trillion is not without hurdles. Data from Gate.io indicates that the growth of the stablecoin market heavily depends on clearer regulatory frameworks and a revival of the crypto bull market.

Recent market volatility serves as a reminder. For instance, on February 24, 2026, the stablecoin USD1, supported by the Trump family, briefly de-pegged to 0.994 USD earlier today. Although it quickly recovered to 0.9994 USD, it highlights that the mechanisms and security of stablecoins remain key concerns. Data from Gate.io shows that this incident did not trigger widespread panic, and major stablecoins like USDT and USDC remain highly anchored.

Standard Chartered views the current slowdown as a cyclical adjustment. As U.S. regulations such as the GENIUS Act are gradually implemented, institutional adoption is expected to accelerate. Stablecoins will then evolve from mere intermediaries for crypto trading into vital bridges connecting traditional fiat currencies with the digital financial ecosystem.

Conclusion

Standard Chartered’s forecast paints a future picture of financial integration: stablecoins will no longer be just “blood bags” in the crypto market but will evolve into a crucial foundation of the U.S. Treasury market. If the $2 trillion stablecoin market cap becomes reality by 2028, holding over $1 trillion in U.S. short-term Treasuries, it will not only provide stable financing for the U.S. government but also profoundly influence global interest rates and debt structures.

For investors, monitoring on-chain stablecoin data, transparency of reserves, and macroeconomic policy changes will be key to capturing market trends in the coming years. Gate will continue to deliver the latest market insights and in-depth analysis to help you navigate the wave of digital assets with confidence.