The rapid expansion of stablecoins could significantly reshape United States government debt markets over the next several years, according to a new analysis from Standard Chartered. The bank projects that the global stablecoin market capitalization may reach 2 trillion dollars by the end of 2028, potentially generating up to 1 trillion dollars in fresh demand for US Treasury bills.
As of early 2026, the total stablecoin market stands at roughly 300 to 320 billion dollars. If the market expands as forecast, stablecoin issuers would need to purchase substantial quantities of short term government debt to back newly issued tokens. Analysts estimate that this could translate into between 800 billion and 1 trillion dollars of additional T bill demand over the next three years.
Stablecoin issuers such as Tether and Circle have already become major buyers of short dated US government securities. These companies hold large reserves in Treasury bills to support tokens like USDT and USDC, earning yield while maintaining liquidity and redemption stability. As inflows increase, issuers typically allocate new capital into low risk, highly liquid instruments such as T bills, effectively channeling crypto related capital into federal financing markets.
Standard Chartered noted that this demand would coincide with projected Federal Reserve purchases of approximately 1 to 1.2 trillion dollars in Treasury bills through 2028. Combined, total new demand could reach around 2.2 trillion dollars. By comparison, if the Treasury maintains its current issuance structure, net new supply of T bills would total roughly 1.3 trillion dollars over the same period, implying a potential shortfall of about 900 billion dollars.
The bank suggests that such excess demand could provide the Treasury Department with flexibility to increase the share of short term bills in overall issuance. Raising the T bill allocation by 2.5 percentage points over three years would generate approximately 900 billion dollars in additional supply, narrowing the projected gap. In theory, reallocating issuance toward bills could reduce pressure on longer dated bonds and potentially allow for a temporary pause in 30 year bond auctions.
The Treasury has acknowledged growing private sector demand for short term government debt, particularly from stablecoin issuers. As digital asset markets evolve, the integration of blockchain based financial instruments with traditional sovereign debt markets is becoming more pronounced.
Although stablecoin growth has slowed in recent months amid broader crypto market weakness, analysts characterize the slowdown as cyclical rather than structural. If adoption accelerates again, stablecoins could emerge as one of the largest marginal buyers of short term US government securities, reinforcing demand at the front end of the yield curve and influencing overall rate dynamics.
