Standard Chartered predicts that the global stablecoin supply will rise to $2 trillion by the end of 2028, a nearly tenfold increase from the current level of around $230 billion.
Standard Chartered Forecasts $2 Trillion Stablecoin Market by 2028, Driven by US Regulation
The forecast, detailed in a new report published today, is based on the expectation that upcoming U.S. legislation will legitimize and accelerate the adoption of the rapidly growing digital asset class.
Bank analysts led by Geoffrey Kendrick, global head of digital asset research at Standard Chartered, say the Driving and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which passed the Senate Banking Committee last month, is likely to become law this summer.
The law is expected to provide regulatory clarity on stablecoins, helping the industry scale significantly in the coming years.
“We estimate that this will cause the total stablecoin supply to increase from $230 billion today to $2 trillion by the end of 2028,” the report said. “This has implications for both U.S. Treasury purchases (for reserve purposes) and USD hegemony.”
Stablecoins Could Be Major Buyers of US Treasury Bonds
The expected growth will have significant ripple effects on the broader financial system, particularly the U.S. Treasury market.
Analysts estimate that the stablecoin industry will need to purchase $1.6 trillion worth of U.S. Treasury bonds over the next four years to meet its reserve requirements. That demand would make the industry one of the largest bond buyers, rivaling foreign central banks.
“Based on post-COVID trends of the last four years, the only demand of similar magnitude is from foreign buyers,” the analysts noted.
Standard Chartered also believes that this rapid expansion strengthens the US dollar’s dominance in global trade and finance. Analysts argue that the increasing demand for US dollar-backed stablecoins will strengthen the dollar’s status, at least in the medium term.
*This is not investment advice.
