Stablecoins Set to Scoop Up $1T in T-Bills by 2028: Standard Chartered

Stablecoin issuers could become one of the largest structural buyers of short-term U.S. government debt within the next three years, according to a new report from international banking group Standard Chartered.

Geoff Kendrick, Global Head of Digital Assets Research, and John Davies, U.S. Rates Strategist at Standard Chartered, project that stablecoin market capitalization will reach $2 trillion by the end of 2028, up from roughly $309 billion today, according to CoinGecko data.

That growth alone would generate roughly $0.8 trillion to $1.0 trillion in incremental demand for U.S. Treasury bills, as issuers hold short-dated government securities as reserves, the analysts said in a note shared with Decrypt.

When combined with expected Federal Reserve purchases of $500 billion to $600 billion via Reserve Management Purchases and a similar amount from reinvesting maturing mortgage-backed securities, Kendrick and Davies estimate total new T-bill demand of around $2.2 trillion between now and 2028.

“Our projections suggest USD 0.9tn of excess demand for T-bills if their share of outstanding debt is not increased – in other words, T-bills could become too scarce if no action is taken,” Kendrick and Davies wrote.

The analysts note that one way to offset the imbalance would be to increase T-bill issuance while reducing long-dated bond supply.

“Shifting USD 0.9tn of T-bond supply to T-bills to cover the excess demand would effectively allow 30Y auctions to be suspended for the next three years,” they wrote.

The report notes the Treasury is already watching, as its February Quarterly Refunding Announcement said it is “monitoring SOMA purchases of Treasury bills and growing demand for Treasury bills from the private sector.”

Stablecoin growth slows

Stablecoin growth has slowed in recent months amid weaker digital asset markets and adjustments following the passage of the GENIUS Act last year, according to the report.

Kendrick and Davies described that pause as “cyclical rather than structural,” maintaining their longer-term $2 trillion market cap forecast.

The outlook builds on Kendrick’s earlier estimate that roughly $500 billion in deposits could shift from banks into stablecoins by 2028.

Some market participants say the macro impact may be limited unless stablecoins reach significant scale.

“If stablecoins hold Treasuries as reserves, the macro linkage is not fundamentally different from stablecoins holding fiat in the banking system—in both cases, a large pool of private liquidity is choosing a particular form of safe asset,” Kevin Lee, Chief Business Officer of Gate, told Decrypt.

“The impact on the yield curve and monetary conditions should be marginal unless the scale becomes truly substantial,” he added.

Lee said a $2 trillion stablecoin market cap, roughly 30% of the $6–7 trillion T-bill market, means “even passive reserve allocation can start to matter at the margin: bill yields, funding conditions, and the Treasury’s issuance mix could become more sensitive to reserve flows, particularly during stress-driven redemptions.”

Nic Puckrin, co-founder of Coin Bureau and lead market analyst, told Decrypt the bigger concern is actually “liquidity concentration, especially if the stablecoin market does indeed balloon to $2 trillion,” warning that issuers could “inadvertently amplify market stress by buying T-bills when liquidity is high and selling into a low-liquidity environment.”

Puckrin said redemptions mostly occur on exchanges, meaning issuers aren’t “under pressure to liquidate assets immediately,” and that there are “buffers in place” unless trust in a stablecoin erodes.