Standard Chartered: Stablecoins Poised to Transform U.S. Treasury Market as $750B Threshold Looms
Stablecoins could significantly reshape the U.S. Treasury market if their total market size hits $750 billion by 2026, according to Geoff Kendrick, head of digital assets research at Standard Chartered.
In a report published Tuesday following meetings with policymakers and financial institutions in Washington, New York, and Boston, Kendrick noted a growing consensus across crypto firms, asset managers, and lawmakers: once stablecoins reach that scale, they may start influencing how the U.S. government issues debt, as well as the broader demand for Treasuries and the Federal Reserve’s monetary policy tools.
Currently, stablecoins have a market capitalization of roughly $240 billion. However, Kendrick’s industry contacts believe the sector could more than triple in size within the next 18 months, especially if bipartisan legislation like the GENIUS Act — aimed at regulating stablecoins — passes in the near future.
“As the U.S. stablecoin market expands, the requirement for T-bills to back those digital tokens could drive changes in Treasury issuance strategies,” Kendrick wrote. “That might shift issuance towards short-term bills and away from longer-dated bonds, with potential implications for the yield curve and demand for dollar-denominated assets.”
Stablecoins, which aim to maintain a fixed value, are usually pegged to the U.S. dollar and backed by highly liquid assets such as short-term government debt. As adoption grows, the demand for such reserve assets could increasingly intersect with traditional bond markets.
Kendrick said his meetings with crypto-native companies, traditional hedge funds, bitcoin miners, and regulators all revealed one common theme: stablecoins are firmly in focus.
However, he also highlighted risks for emerging markets, where rapid adoption of stablecoins as alternatives to local currencies and bank savings could strain domestic financial systems and reduce central bank reserves. This may pose challenges for countries heavily reliant on dollar liquidity or operating fixed exchange rate regimes.
In the U.S., Kendrick sees stablecoins gradually drawing corporate treasurers toward blockchain-based tokenized cash solutions and away from traditional banking products. However, he cautioned that the pace of this transition remains uncertain.
Investor enthusiasm for stablecoins is already rippling through public markets. Shares of Circle (CRCL), issuer of the USDC stablecoin, have surged 540% since listing last month — underscoring the market’s growing belief that stablecoins will play a central role in the next phase of digital finance.
