Standard Chartered Bank: The stablecoin market size may reach $2 trillion by 2028, driving an increase of over $1 trillion in demand for short-term U.S. Treasury bonds.

Deep Tide TechFlow News, February 23 — According to The Block, Geoffrey Kendrick, the Global Head of Digital Asset Research at Standard Chartered Bank, and US interest rate strategist John Davies stated in their latest research report that stablecoin issuers are gradually becoming one of the largest buyers of US short-term government bonds (T-bills). The report projects that the market capitalization of stablecoins will reach $2 trillion by the end of 2028, driving an additional demand of approximately $800 billion to $1 trillion for government bonds, mainly concentrated in the 0 to 3-month short end.

Standard Chartered estimates that, including the Federal Reserve’s reserve management purchase programs and the replacement of maturing mortgage-backed securities, the total new demand for short-term government bonds by 2028 could reach about $2.2 trillion. During the same period, the net supply of government bonds is approximately $1.3 trillion, resulting in a gap of about $900 billion. To fill this gap, the US Treasury may need to adjust its debt issuance structure, shifting some long-term bond supply to the short end. If approximately $900 billion is moved from the long end to short-term bonds, it could theoretically enable a three-year pause on 30-year Treasury auctions, similar to operations conducted by the US between 2002 and 2006.

Currently, the largest stablecoin issuer, Tether, has a circulation of about $185 billion, holding over $120 billion in US short-term government bonds, making it one of the world’s largest holders of short-term US debt. On the regulatory front, the GENIUS Act was established in July 2025 to create a federal regulatory framework, requiring US-regulated stablecoin issuers to hold high-quality liquid assets as reserves, with short-term government bonds being their core allocation.