Digital Assets Projected to Boost US Debt Demand by $2 Trillion

Treasury Secretary Scott Bessent has highlighted the potential for a significant increase in demand for government debt from the digital asset sector, projecting that this demand could reach $2 trillion over the next several years. This projection underscores the growing financial relevance of digital assets to the broader economy and the need for the US to take a leadership role in shaping global standards for crypto markets.

Bessent emphasized that the US has a unique opportunity to guide innovation in the crypto space while also benefiting from it. He pointed to the increasing integration of stablecoins and other blockchain-based financial products with the US dollar and Treasury markets as evidence of how digital assets can support national financial interests.

Much of the projected demand for government debt is expected to come from stablecoins, which rely heavily on US Treasury bills to maintain their reserves. Tether, the largest stablecoin issuer, held nearly $120 billion in short-term Treasury bills as USDT reserves as of the end of March. Circle, the firm behind the USD Coin (USDC), reported over $22 billion in T-bill holdings as of February 2025. As the circulation of stablecoins grows, so does the need for corresponding collateral in low-risk assets like Treasuries.

The link between digital assets and US debt markets is becoming more entrenched, as private issuers increasingly function as steady institutional buyers of government securities. This emerging source of demand may offer Treasury markets a new layer of resilience and liquidity, particularly amid broader concerns about foreign appetite for US debt.

Proposed legislation, such as the STABLE Act of 2025 and the GENIUS Act of 2025, aims to formalize the role of stablecoin issuers in the Treasury ecosystem. These bills would require issuers to fully back their tokens with high-quality liquid assets, including short-term Treasuries. However, there are concerns that these bills could be delayed due to political divisions between Democrats and Republicans. Nine lawmakers recently withdrew support for the bill, citing concerns that it lacks rules that would sufficiently protect investors.

If passed, these bills could effectively institutionalize Treasury investment requirements across the stablecoin sector, anchoring digital dollars more deeply within the US financial infrastructure. Advocates of the bill believe that such rules would bolster trust in stablecoins while cementing the dollar’s primacy in digital markets.