Standard Chartered Anticipates $2 Trillion in Stablecoin Supply by 2028

Standard Chartered believes stablecoin supply could swell to $2 trillion by 2028, driving $1.6 trillion in new demand for US Treasury bills

Standard Chartered predicts that the total supply of stablecoins could swell to $2 trillion by 2028. This surge in stablecoins would be fueled by the upcoming U.S. legislation, which aims to create a regulatory framework for stablecoins, ultimately driving $1.6 trillion in new demand for U.S. Treasury bills.

The report, authored by StanChart’s head of digital assets research Geoffrey Kendrick, focuses on the implications of the U.S. GENIUS Act, specifically designed to integrate stablecoins into the existing financial system.

This bill, which cleared the Senate Banking Committee in March and is expected to be signed into law by summer, is set to impose strict regulations on stablecoin issuers, requiring them to maintain full reserves in highly liquid U.S. assets.

According to Standard Chartered's analysis, this regulation would optimalize shorter-term T-bills as the preferred reserve asset due to liquidity needs and the desire to avoid a "duration mismatch."

The report highlights that the Trump administration's final budget plans for 2021 included $1 trillion in annual T-bill issuance, which could be fully absorbed by stablecoin issuers over the subsequent seven years.

Moreover, considering that the administration's plans involved reducing the T-bill issuance to $750 billion after the first year, the potential demand from stablecoin issuers would outstrip the available supply.

However, it's important to note that this demand projection from Standard Chartered specifically pertains to newly issued stablecoins, not legacy tokens or digital assets in general.

The bank of England also predicts that bitcoin price could rise to $500K by 2025.

As the cryptocurrency market continues to evolve, it will be interesting to observe how these predictions unfold and how the integration of cryptocurrencies into the global financial system progresses.