Stablecoins Could Become Trillion-Dollar Treasury Buyers
Treasury Secretary Scott Bessent has proposed that stablecoin firms could become trillion-dollar buyers of US Treasury bills. If the stablecoin market doubles to $2 trillion by 2028, it could generate between $800 billion and $1 trillion in additional demand for T-bills.
This vision is rooted in the GENIUS Act, signed into law on July 18, 2025, which requires US-regulated stablecoin issuers to back their tokens 100% with highly liquid assets, specifically short-term Treasuries with maturities of 93 days or less.
The largest stablecoin issuer, Tether, already has over $141 billion in direct and indirect Treasury exposure, while Circle, the issuer behind USDC, also holds substantial Treasury reserves. The stablecoin market currently sits at around $300 billion to $310 billion, with projections suggesting a $2 trillion to $4 trillion market by 2030 under favorable conditions.
If Bessent's projection materializes, it would redefine who funds the American government's borrowing habit and provide structural support for T-bill demand. However, there is also a risk of concentration, as stablecoin issuers could become systemically important buyers of short-term government debt, creating an unexpected void in T-bill demand if their demand were to contract suddenly.