Stablecoin Market Expected to Explode in Value, Pushing Total Market Cap to $2 Trillion by 2028

The growth will generate $1.6 trillion in additional demand for U.S. Treasury bills, effectively absorbing the entire new T-bill issuance planned during President Trump's second term.

According to Geoffrey Kendrick, Head of Digital Assets Research at Standard Chartered, forthcoming U.S. regulatory framework is expected to push the stablecoin market to new highs, ultimately reaching $2 trillion by the end of 2028.

In a note published Monday, Kendrick predicts that the expected passage of the GENIUS Act, which will clarify the legal treatment of stablecoins and likely occur sometime this year, will unlock a massive wave of demand for tokenized dollar-based instruments.

“That growth will need an extra $1.6 trillion of U.S. T-bills to be held as reserves,” he said, adding that this figure is equal to the entire new T-bill issuance planned during President Trump’s second term.

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“The stability of the U.S. financial system and political system are key to rendering unbacked digital monies trustable. And that trust is essential for this new asset class to take off.”

Why It Matters: The GENIUS Act, which passed the Senate Banking Committee in April, is expected to be passed by Congress and signed by President Donald Trump sometime this summer.

Once enacted, it will mandate that stablecoin reserves be held in instruments with a duration of no more than 93 days.

Kendrick anticipates that most issuers will opt for a strategy similar to Circle's model for USDC USDC/USD reserves, which holds 88% of its backing in Treasury bills with an average duration of just 12 days.

If the optimistic projections are realized, the estimated $1.6 trillion in new T-bill demand would make stablecoin issuers the second-largest class of short-term U.S. government debt holders, trailing only money market funds, which currently hold $2.4 trillion.

Moreover, the boom in stablecoins could also serve to reinforce the U.S. dollar's global influence.

“Rising demand for USD-denominated stablecoin reserves would create additional demand for USD,” Kendrick stated, suggesting that this trend will "further entrench USD dominance of stablecoins" and help offset macro headwinds such as ongoing tariff disputes.

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