Standard Chartered still expects the stablecoin market to reach $2 trillion by the end of 2028, which should translate into about $1 trillion in new demand for Treasury bills, the bank said in a Monday report.
As of early 2026, the total stablecoin market cap is around $300-$320 billion.
“This will result in approximately $0.8-$1.0 trillion of fresh demand for T-bills (for use as reserves) from stablecoin issuers during that period,” wrote Geoff Kendrick, head of digital asset analysis, and US fixed income strategist John Davies.
Combined with $1-$1.2 trillion in expected Federal Reserve purchases, total new demand for Treasuries could hit about $2.2 trillion through 2028, the report said. That compares with about $1.3 trillion in net new supplies if the bills’ share of total debt remains unchanged, implying a potential deficit of $0.9 trillion.
Stablecoin issuers like Tether and Circle (CRCL) have become big buyers of short-term US government debt and hold tens of billions of dollars in Treasury bills as reserves backing tokens like USDT and USDC.
Tether alone has revealed treasury holdings that rival mid-cap sovereign investors, while Circle also holds a significant portion of its reserves in short-term government bonds via money market funds.
As the stablecoin market grows, issuers typically park new inflows in Treasuries to earn returns while maintaining liquidity, effectively channeling crypto-fueled capital into US government funding and bolstering demand at the front end of the yield curve.
The Treasury said in its quarterly repayment notice (QRA) on February 4 that it is “monitoring SOMA purchases of Treasury bills and growing demand for Treasury bills from the private sector”, a trend which Standard Chartered expects to intensify.
The analysts said the expected excess demand gives Treasury Secretary Scott Bessent the opportunity to lift the Treasury bill’s share of issuance. Raising that share by 2.5 percentage points over three years would create about $0.9 trillion in additional bill supply, making up the difference.
Reallocating that amount from longer-dated bonds could effectively suspend 30-year auctions for three years and ease upward pressure on long-term yields, according to the report.
While not the baseline scenario, the bank expects the 10-year yield to reach 4.6% by the end of 2026 as analysts warned of rising risks of front-end scarcity.
Stablecoin growth has recently stalled just above $300 billion, up from $238 billion in April 2025, as crypto prices weakened and issuance slowed post-GENIUS Act. Bitcoin has fallen more than 50% from its peak of $126,000 in October 2025, dampening trade-driven demand. Standard Chartered sees this headwind as cyclical and maintains that stablecoins could add nearly $1 trillion in incremental demand for Treasuries by 2028, reshaping US fixed income markets.
Read more: Standard Chartered sees bitcoin slide to $50,000, ether to $1,400 before recovery
