US Treasury Forecasts $2 Trillion Stablecoin Market Cap by 2028

The US Treasury has released a forecast indicating that stablecoins may reach a $2 trillion market cap by 2028, significantly altering the financial landscape. This projection is based on evolving market dynamics, structures, and incentives that could accelerate the growth of stablecoins. The current market capitalization of stablecoins is approximately $234 billion, and the forecast suggests a substantial increase over the next few years.

Several factors are driving this growth, including regulatory changes and an increased institutional adoption of stablecoins tied to US Treasury bills. According to the US Treasury Borrowing Advisory Committee (TBAC), the market for stablecoins could reach $2 trillion by 2028. This growth is expected to be fueled by compliance with new regulations, which will require stablecoin issuers to hold reserves primarily in short-dated T-bills. This shift could enhance the relationship between stablecoin adoption and T-bill demand, as noted by Tracy Jin, COO of MEXC exchange.

However, the influx of stablecoins could also compel retail banks to offer higher interest rates to depositors as they maneuver to maintain competitiveness. This development has raised concerns among some experts, including cryptocurrency advocate Max Keiser, who warns that the rise of stablecoins could challenge the stability of the US dollar, potentially increasing the national debt. Keiser has linked the upsurge in stablecoin usage to rising national debt levels, contradicting promises of financial reform. He noted, “It also means that US indebtedness goes up, not down, as Trump has promised.”

Geoff Kendrick, Head of Digital Assets Research at Standard Chartered, corroborated the Treasury’s outlook, noting that the US Treasury is using their $2 trillion stablecoin forecast for their own projection. Kendrick expects imminent legislation to spur stablecoin issuance further, raising critical questions about its implications for the T-bill market. He elaborated, “For stablecoins to inflate from $230 billion to $2 trillion by 2028, we would require an additional $1.6 trillion in US T-bills to be held as reserves, which corresponds to all proposed T-bill issuance.”

Amidst this anticipation, Tether is planning to launch a US-only stablecoin by late 2025 or early 2026, according to CEO Paolo Ardoino. He suggested the favorable regulatory stance is designed to bolster the status of stablecoins as strategic financial instruments and place the US at the forefront of the global cryptocurrency landscape. As the market dynamics evolve, increased stablecoin adoption could enhance the legitimacy of the entire cryptocurrency ecosystem, potentially benefiting Bitcoin (BTC) as institutional investors shift their focus towards digital assets.