According to data from the cryptocurrency exchange Coinbase, the stablecoin market is expected to expand to $1.2 trillion by 2028, driven by comprehensive cryptocurrency regulation in the United States.
Coinbase states that this forecast implies that over the next three years, $5.3 billion in short-term U.S. Treasury bonds will need to be issued weekly to meet the demand of stablecoin issuers, who use these bonds as collateral for their digital fiat tokens.
This issuance plan will lead to a temporary decrease of about 4.5 basis points in the three-month Treasury yield, contrary to analysts' predictions that the demand from stablecoin issuers will significantly lower U.S. Treasury rates.
"We believe this forecast does not require unrealistic large-scale or permanent interest rate changes; rather, it relies on gradual adoption supported by policy."
The passage of the GENIUS Act, which is the comprehensive regulatory framework for stablecoins in the United States, will take effect in January 2027 and is a catalyst for the development of the stablecoin market. However, it also prompts other countries to consider launching their own stablecoins.
Growth of the stablecoin market, with other countries also entering the competition.
Private stablecoin issuers like Tether and Circle have become major buyers of U.S. Treasury bonds, surpassing countries like South Korea, the UAE, and Germany.
USD-denominated stablecoins currently dominate the market, but other countries are also exploring stablecoins as a complement to traditional fiat currencies.
The South Korean Financial Services Commission announced it will submit a comprehensive stablecoin regulation bill. Furthermore, although the Chinese government has been opposed to cryptocurrencies and private currencies, it may allow stablecoins backed by the yuan to circulate in the market.