Standard Chartered has released a report indicating that the stablecoin market could generate up to $1 trillion in demand for U.S. Treasury bills by 2028. This potential increase in demand may allow the U.S. government to expand its issuance of Treasury bills while suspending 30-year bond auctions.
As of early 2026, the stablecoin market capitalization stands at approximately $300 to $320 billion. The bank anticipates that this figure will rise to $2 trillion by the end of 2028, leading to significant new demand for Treasury bills, primarily for use as reserves by stablecoin issuers.
“This will result in approximately $0.8 to $1.0 trillion of fresh demand for T-bills from stablecoin issuers over that period,” stated Geoff Kendrick, head of digital asset research, alongside U.S. rates strategist John Davies.
The report notes that combined with projected Federal Reserve purchases of $1 to $1.2 trillion, total new demand for Treasury bills could reach about $2.2 trillion through 2028. This projection contrasts with an estimated $1.3 trillion in net new supply, assuming the share of Treasury bills in total debt remains constant, suggesting a potential shortfall of $0.9 trillion.
Major stablecoin issuers, including Tether and Circle, have emerged as significant buyers of short-term U.S. government debt, holding substantial amounts of Treasury bills as reserves for their tokens, such as USDT and USDC. Tether’s T-bill holdings are comparable to those of mid-sized sovereign investors, while Circle maintains a considerable portion of its reserves in short-dated Treasuries via money market funds.
As the stablecoin market expands, issuers typically allocate new inflows into Treasury bills to generate yield while ensuring liquidity. This practice effectively directs capital from the cryptocurrency sector into U.S. government financing, thereby bolstering demand at the front end of the yield curve.
The U.S. Treasury, in its February 4 Quarterly Refunding Announcement, acknowledged its observation of increasing demand for Treasury bills from the private sector. Standard Chartered predicts that this trend will continue to grow.
The report suggests that the anticipated excess demand provides Treasury Secretary Scott Bessent with the opportunity to increase the share of Treasury bills in government issuance. By raising this share by 2.5 percentage points over three years, approximately $0.9 trillion in additional bill supply could be generated, which would help offset the projected shortfall. This reallocation from longer-dated bonds could potentially lead to the suspension of 30-year bond auctions for three years, alleviating upward pressure on long-term yields.
Though not the bank’s base case, analysts project that the yield on 10-year Treasury notes could reach 4.6% by the end of 2026, citing rising risks of scarcity in the front end of the yield curve.
The growth of the stablecoin market has recently plateaued at just above $300 billion, a rise from $238 billion in April 2025. This stagnation is attributed to declining cryptocurrency prices and a slowdown in issuance following the GENIUS Act. Bitcoin, for instance, has dropped more than 50% from its peak of $126,000 in October 2025, which has dampened trading-driven demand. Nonetheless, Standard Chartered views these challenges as cyclical and maintains that stablecoins could contribute nearly $1 trillion in additional Treasury bill demand by 2028, potentially reshaping U.S. rate markets.
Standard Chartered forecasts that the stablecoin market could generate up to $1 trillion in demand for U.S. Treasury bills by 2028, allowing for increased government issuance and potential suspension of long-term bond auctions. The report highlights the significant role of stablecoin issuers in the short-term debt market as they seek to maintain liquidity and yield.