Stablecoins could reach $2 trillion by 2028

A recent analysis projects a major increase in stablecoins. These cryptocurrencies are backed by real assets. Their supply could reach $2 trillion by 2028. The current market value is about $230 billion. This value could grow tenfold in the coming years. New laws in the United States are expected to drive this growth.

The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act is expected to become law this summer. The US Senate Banking Committee recently passed it. This law should create a clear structure for stablecoins. This will bring more security to the sector. Geoffrey Kendrick at Standard Chartered believes this will speed up stablecoin adoption.

The growth of stablecoins will also increase demand for US Treasuries. The industry may need to buy $1.6 trillion in T-bills over four years. This could absorb all the bonds issued during a potential second Trump term. Stablecoins could become a major driver of demand for US Treasuries.

Circle's reserve model could become the standard. This model backs the USDC stablecoin. It relies on short-term US government bonds. The industry is expected to hold almost $1.75 trillion in Treasuries by 2028.

The rise of stablecoins could strengthen the US dollar's position. This could support the dollar's dominance in global trade. But there are long-term risks. Stablecoins might diversify into other currencies. This could weaken the dollar's power.

New laws will fuel the rise of stablecoins. This will change the global economy. It will also increase demand for T-bills. The dollar's dominance could grow. However, diversifying into other currencies presents risks. This could reduce the dollar's strength in the future.