Stablecoins Could Drive $2 Trillion Demand for U.S. Treasuries

Scott Bessent, the CEO of Key Square Group, has predicted that U.S.-backed stablecoins could generate a significant demand of $2 trillion for U.S. Treasuries. This projection is based on the application of high U.S. regulatory and anti-money laundering (AML) standards to stablecoins, which could open the door to substantial investment in U.S. government securities. Bessent's forecast highlights the potential impact of stablecoins on global debt markets, suggesting that these digital assets could reshape market dynamics and reinforce the dominance of the U.S. dollar.

Bessent's prediction underscores the growing influence of stablecoins in the financial landscape. By adhering to stringent regulatory frameworks, stablecoins could attract a massive influx of capital into U.S. Treasuries, thereby bolstering the U.S. economy. This development could have far-reaching implications for global financial markets, as it would increase the demand for U.S. government debt instruments, potentially leading to lower borrowing costs for the U.S. government and enhanced liquidity in the Treasury market.

Bessent's analysis also points to the broader implications of stablecoins on the global financial system. The integration of stablecoins into the regulatory framework could pave the way for increased adoption and usage of these digital assets. This, in turn, could drive more capital into traditional financial markets, providing a stable and secure investment option for investors worldwide. The potential for stablecoins to generate $2 trillion in demand for U.S. Treasuries underscores their role as a bridge between the cryptocurrency and traditional financial markets, offering a new avenue for investment and capital allocation.

In a recent interview, Bessent expressed strong support for digital assets and stablecoins, emphasizing the U.S. administration's focus on creating clear rules for digital assets and encouraging companies to stay and build in the country. This shift in policy aims to reverse past practices that drove many crypto businesses overseas. Bessent's comments align with the sentiment of other top financial leaders, including BlackRock CEO Larry Fink, who has called tokenization the future of finance.

According to Bessent, bringing strong U.S. regulations and anti-money laundering (AML) standards to stablecoins is a top priority. He also mentioned market estimates suggesting that stablecoin issuers could soon hold around $2 trillion in U.S. Treasuries and T-bills — a huge jump from the current $300 billion. This prediction is supported by a recent comment from Senator Bill Hagerty, who shared a Citibank report forecasting that by 2030, stablecoin issuers could become the biggest buyers of U.S. Treasuries, even ahead of major foreign countries.

A new U.S. stablecoin bill is on track to pass the Senate, marking a step toward establishing formal regulations for the crypto industry. The legislation, part of the GENIUS Act, would require stablecoins to be fully backed by safe, liquid assets such as Treasury bills and enforce strict anti-money laundering and anti-terror financing rules. In the event of a collapse, stablecoin holders would have priority in recovering their funds. Experts say the bill brings long-needed structure, transparency, and investor protection, positioning stablecoins as credible, regulated digital equivalents of national currencies rather than speculative crypto assets.