Standard Chartered, a global banking giant, has released a report predicting a significant surge in the supply of stablecoins, estimating that it could reach a staggering $2 trillion by the year 2028. This growth is expected to drive a massive $1.6 trillion in new demand for US Treasury bills, assuming upcoming US legislation, known as the GENIUS Act, passes as anticipated.
Authored by Geoffrey Kendrick, the head of digital assets research at Standard Chartered, the report suggests that the GENIUS Act, which aims to establish a regulatory framework for stablecoins, will be a game-changer for the industry. The bill, which has already cleared the Senate Banking Committee, is likely to be signed into law by the summer.
Under the GENIUS Act, stablecoins will be required to be fully reserved, with a preference for highly liquid assets such as US Treasury bills. This mandate is expected to lead to consistent and substantial purchases of government debt as the stablecoin supply expands. Kendrick noted that the demand generated by this legislation could absorb all the new T-bill issuance planned during the second term of former President Trump.
Unlike previous speculative growth in the stablecoin market, Standard Chartered believes that the demand for stablecoins will now be structurally linked to financial markets, with issuers needing to match circulating token supply with liquid reserves. The projected $1.6 trillion in T-bill demand only accounts for newly issued stablecoins under these regulatory conditions, excluding legacy tokens or other digital assets.
The report also highlights the potential impact of regulated, dollar-backed stablecoins on the global demand for the US dollar, especially in regions facing currency instability or capital controls. Standard Chartered suggests that the ability to access tokenized dollars through blockchain technology could strengthen the dollar’s international role without relying on traditional banking channels.
Geoffrey Kendrick emphasized that this new form of dollar export could serve as a counterbalance to threats against the US dollar’s hegemony, such as increasing trade barriers and monetary fragmentation. As stablecoins become more integrated with the US financial system through legislation, they are poised to play a significant role in global dollar liquidity and financial support.
With the expected growth of stablecoins and their alignment with US regulatory standards, these digital assets could evolve from a niche crypto tool to a crucial component of the global financial landscape, offering new opportunities for liquidity management and international transactions.
As Standard Chartered’s research points towards a transformative future for stablecoins and their impact on the US Treasury market, the financial industry is closely watching how these developments will shape the digital economy in the years to come.