Overview
Standard Chartered analysts say stablecoin issuers are fast emerging as major purchasers of US Treasury bills. The bank's forecasts imply that the expansion of stablecoin reserves could transform near-term Treasury issuance dynamics and present the Treasury with an unusual policy choice.
Projected demand and market drivers
The bank expects the stablecoin market capitalization to reach $2 trillion by the end of 2028. That increase in token-backed reserves is estimated to create as much as $1 trillion in new demand for T-bills, as issuers favor highly liquid short-term securities to back their tokens.
The analysts acknowledge that stablecoin growth has recently slowed following the passage of the US GENIUS Act, but they characterize that slowdown as cyclical rather than structural. When combined with Federal Reserve measures cited by the analysts, total new demand for T-bills could rise as high as $2.2 trillion.
Comparison with expected supply
Standard Chartered contrasts the potential surge in demand with projected issuance under the Treasury's current debt-mix plans. The bank notes that the $2.2 trillion in potential demand notably exceeds the $1.3 trillion in new supply the Treasury would issue if it preserves its existing debt ratios.
That gap, the analysts warn, could render T-bills relatively scarce in the private sector absent policy adjustments. They frame the situation as a substantial imbalance between private demand for short-term liquidity and the Treasury's planned supply.
Tactical options for the Treasury
The analysts quantify the projected excess demand at roughly $0.9 trillion, and they identify this as a tactical opening for Treasury Secretary Scott Bessent. One remedy would be to increase the share of total federal debt issued as T-bills to relieve shortages at the front of the curve.
At present, T-bills constitute 21.7% of total federal debt, according to the figures presented. That sits below the post-World War II average of 26.1%. Standard Chartered calculates that raising the T-bill share by 2.5 percentage points would offset the additional demand generated by stablecoin reserves.
Implications for longer-term issuance and yields
Most strikingly, the analysts state that shifting the roughly $0.9 trillion in supply from longer-dated bonds to bills - under the current auction timetable - would effectively permit the Treasury to suspend all 30-year bond auctions for the next three years.
The note predicts that such a reallocation would likely produce a bull flattening of the yield curve. At the same time, Standard Chartered retains a base case outlook of a bear steepening for 2026, and it cautions that the growing role of digital-asset reserves is a risk bond investors now need to monitor.
Context limitations
The analysis and figures in this piece reflect the projections and assessments attributed to Standard Chartered analysts. The description of recent stablecoin growth dynamics cites a pause after the US GENIUS Act; the analysts characterize that as a cyclical slowdown. The piece does not add or alter those projected amounts or the tactical options outlined by the analysts.