- The global stablecoin market could surge nearly tenfold to $2 trillion by the end of 2028.
- That expansion would be driven by expected U.S. regulatory clarity for stablecoins.
- The report also notes that larger stablecoin reserves would increase demand for the U.S. dollar.
The global stablecoin market could expand almost tenfold to $2 trillion by the end of 2028, propelled by anticipated U.S. regulatory clarity, according to a new report from Standard Chartered.
Analysts at the bank, led by Geoffrey Kendrick, project that forthcoming legislation will legitimize the asset class, accelerate adoption, and reinforce the U.S. dollar’s role at the center of the digital finance ecosystem.
The proposed law, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, passed the Senate Banking Committee last month and is expected to become law this summer.
Standard Chartered argues the bill would formalize operating standards and reserve requirements for stablecoin issuers, driving a dramatic rise in market supply from $230 billion to $2 trillion over four years.
Implications for the U.S. Treasury and dollar dominance
Such an expansion would have significant implications for the U.S. Treasury securities market.
Analysts estimate stablecoin issuers would need to purchase roughly $1.6 trillion of short-dated U.S. Treasury bills by 2028 to meet reserve requirements, representing a sizable source of demand for new T-bill issuance during President Donald Trump’s next term.
“Based on post-COVID trends over the past four years, the only comparable-sized demand has come from foreign buyers, but that demand was spread across bills, notes and bonds,” the report said.
The GENIUS Act would require stablecoin reserves to be held in assets with maturities of 93 days or less, effectively channeling capital into the T-bill market.
Standard Chartered highlights Circle’s reserve model—as of the report, 88% of USDC reserves were held in government securities with an average maturity of 12 days—as likely to become the industry benchmark once rules are formalized.
Dollar strength in the medium term
The report adds that larger stablecoin reserves would boost demand for the U.S. dollar and further entrench the dollar’s dominance in cross-border trade and payments.
“The holy grail of international finance is an alternative to the dollar that provides the same combination of flexibility and liquidity,” the report noted.
For now, rapid innovation in dollar-backed stablecoins is more likely to deepen dollar reinforcement, according to Kendrick.
However, analysts caution that long-term risks to dollar hegemony could emerge if stablecoin development shifts toward multi-currency or non-dollar-denominated tokens.
Although previous initiatives—such as an IMF Special Drawing Rights-like basket—failed to gain broad adoption, a sufficiently liquid multi-currency digital asset basket could attract central banks and sovereign wealth funds if digital asset reserves achieve institutional legitimacy.
At present, Standard Chartered views progress on U.S. regulation as the catalyst for one of the largest structural shifts in global cash flows, with stablecoins poised to become a dominant vehicle for digital payments and financial reserves.