Standard Charter analysts said if Donald Trump signs off to the new crypto rules this summer, Stubcoin could withstand $2 trillion in supply by 2028, potentially pushing $1.6 trillion in new demand for the U.S. Treasury bill.
Currently, Stablecoins has a total market capitalization of around $200 billion, most of which is supported by short-term government debt, such as T-Bill.
Stanchart’s London-based analyst Geoff Kendrick said this kind of legal clarity would flip the switch. His figures show a $400 billion annual surge in demand for T-Bill over four years. This is the entire period of the second Trump term. And many of those purchases could absorb all of the new short-term debt the government is set to issue during that period.
“The increased demand for USD-controlled Stablecoin Remerves will create additional demand for USD,” Kendrick said in a research note.
New invoices will be eaten in Stablecoin reserves
Kendrick said these influxes were not just side effects. This makes Stablecoins the largest group of buyers for the long term in the US. He said that even foreign buyers were spreading demand for T-billes, memos and bonds after Covid didn’t reach that level.
In contrast, stubcoins focus on lasers on short-term debt, as they fit into the structure. It is safe, dollar-based, and gives liquidity without trapping capital for a long time.
“The industry can explain the biggest purchase flows for any sector across all US Treasury,” Kendrick wrote in a nine-page report last Tuesday.
This is because the Stablecoin issuer uses financial notes as reserves. It’s not a preference – it’s necessary. These crypto tokens need backing that matches their promise to be “stable.” Most are pinned in US dollars, and the only way to back up that promise without resorting to junk is to park your money in short-term government debt.
And that demand helps the dollar retain its position globally. Kendrick said this kind of move could offset the current threat, particularly those coming from rising trade tensions that are putting pressure on tariffs and greenback values.
“It’s likely that stickiness is sticky given the strong network effects on digital assets, and it needs to strengthen the dominance of the stubcoin, which is even more entrenched,” Kendrick said.
Stablecoins are nothing new, but what’s changing is the speed of growth and the regulatory momentum behind it. Market capitalization this year has already risen by 11%, and about 47% over the last 12 months, with Tether and US dollar coins still holding the top spot.
The Genius Act, cleared by the Senate Banking Committee in March, and the stable law, passed by the House Financial Services Committee earlier this month, are two important bills here. Both focus specifically on stablecoin regulations. The bet is that once Trump returns and signs the law on them, the legal mist will be lifted and the big players will start scaling quickly.
“If Stablecoins make USD even easier to use, there is a high chance that demand for USD assets that support Stablecoins will increase,” Kendrick said.
“The strength of the network effects in digital assets suggests that once the USD’s advantage is further solidified, it will be difficult to take away,” he writes. “The Holy Grail of International Finance finds an alternative to USD, which offers the same flexibility and liquidity as USD.”
Ironically, however, Kendrick’s report shows that stubcoin’s growth may only make the dollar even more dominant. The deeper these assets dig into defi and payments, the more USD reservations will be required. And as long as most of them are supported by T-Bill, they will continue to supply that short-term debt machine.
