Rich by Coin

Stablecoin issuers could become one of the largest buyers of short-term U.S. government debt over the next three years, potentially reshaping Treasury financing decisions, according to a new forecast from Standard Chartered. The bank projects that the total value of dollar-backed stablecoins in circulation will grow from roughly $309 billion today to $2 trillion by the end of 2028. Because stablecoin issuers typically hold short-term U.S. Treasury bills as reserves to back their tokens, that expansion would translate into significant new demand for government debt.

Standard Chartered’s analysts estimate that growth in the stablecoin market alone would generate between $800 billion and $1 trillion in additional demand for Treasury bills over that period. When combined with expected Federal Reserve purchases of Treasury bills and reinvestments of maturing mortgage-backed securities, total new demand could reach about $2.2 trillion by 2028. The bank argues that this would create roughly $900 billion in excess demand for Treasury bills if the government does not increase their share of total outstanding debt. In practical terms, that means there may not be enough short-term debt available to satisfy buyers.

To address that imbalance, the analysts suggest the Treasury could increase issuance of short-term bills while reducing the supply of long-term bonds. Shifting about $900 billion from long-dated bonds into Treasury bills, they write, could effectively allow the government to suspend auctions of 30-year bonds for the next three years.

The Treasury Department appears aware of the trend. In its February Quarterly Refunding Announcement, the department said it is “monitoring” purchases of Treasury bills by the Federal Reserve and the growing demand from private-sector buyers. The bank has also previously estimated that as much as $500 billion could move out of traditional bank deposits into stablecoins by 2028. The shift would reinforce stablecoins’ role as large holders of short-term government debt. The forecast underscores how rapid growth of digital dollar tokens could intersect with federal debt management.