tl;dr
Standard Chartered projects stablecoin supply could reach $2 trillion by 2028, spurring $1.6 trillion in new demand for US Treasury bills if the US GENIUS Act passes. The legislation would require fully reserved stablecoins backed by highly liquid US assets like T-bills, driving large-scale governme...
Standard Chartered projects that the supply of stablecoins could reach an impressive $2 trillion by 2028, fueled primarily by the US GENIUS Act. This legislation aims to establish a clear legal framework requiring stablecoins to be fully reserved, mainly backed by highly liquid US Treasury bills.
The legislation is expected to generate $1.6 trillion in new demand for short-term US government debt, directly linking stablecoin growth to fiscal markets and liquidity management. Stablecoin issuers will need to match circulating tokens with liquid reserves, making government debt purchases a structural aspect of stablecoin expansion.
Beyond just demand for US Treasury bills, regulated, dollar-backed stablecoins stand to strengthen the US dollar’s global dominance. By providing accessible tokenized dollars, these stablecoins can be particularly valuable in regions grappling with currency instability or capital controls, deepening the dollar’s international presence without depending on traditional banking systems.
Analyst Geoffrey Kendrick highlights that this regulatory environment could absorb the entirety of T-bill issuance planned during previous administrations, emphasizing the substantial fiscal footprint stablecoins may establish.
This evolution suggests stablecoins might shift from being primarily crypto-native assets to becoming essential components of global dollar liquidity and fiscal support. In doing so, they could help offset rising trade barriers and monetary fragmentation that currently challenge US dollar hegemony.
In summary, with stablecoin supply poised to surge to $2 trillion and creating $1.6 trillion in government debt demand, the US GENIUS Act could catalyze a profound transformation. Dollar-backed stablecoins may soon underpin a new era where blockchain-based finance reinforces traditional national currencies and reshapes global monetary dynamics.