DeutschCould crypto of all things strengthen Washington’s position? A new analysis by the British major bank Standard Chartered paints a scenario that makes even experienced market observers sit up and take notice: by 2028, stablecoins could generate up to a trillion dollars in new demand for US government bonds—becoming a silent pillar for American debt financing.
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What sounds like a digital niche product has long since arrived at the heart of the financial system. Stablecoins, which are cryptocurrencies pegged to the dollar, no longer serve merely as a means of trading on crypto exchanges. Since the passing of the so-called GENIUS Act in July 2025, regulated issuers must hold their reserves in high-quality, liquid assets—primarily in short-term US Treasury bills. Digital dollars are thus effectively becoming buyers of American debt securities.
How stablecoins could pull the US out of the debt spiral
The market has already grown. The global stablecoin supply currently stands at over $300 billion. According to analysts Geoffrey Kendrick and John Davies from Standard Chartered, it is expected to rise to two trillion dollars by 2028. The result: between $800 billion and one trillion dollars could additionally flow into short-term US government bonds. The majority of this demand would arise at the short end of the yield curve.
In plain English: stablecoin issuers could become some of the largest buyers of T-bills. And this would not be through reallocation, but through genuine, new demand. The report assumes that around $900 billion in additional capital could flow into the market over the next three years alone.
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This growth is primarily driven by emerging markets. Where inflation eats away at purchasing power and currencies fluctuate, people seek protection in the dollar—increasingly in digital form. Those holding stablecoins in Buenos Aires or Istanbul are indirectly supporting the market for US government bonds. Crypto capital is thus quietly flowing into the financing of the world’s largest economy.
Crypto could come to Washington’s rescue
For the US Treasury, this is no mere side note. The larger the stablecoin reserves, the stronger their influence on issuance policy. If demand actually grows on this scale, shortages could occur in short-term securities if the supply is not adjusted. US Treasury Secretary Scott Bessent has already hinted that stablecoins could play a role in American debt management.
The scenario holds both opportunities and risks. On the one hand, it strengthens the global position of the dollar in the digital space. On the other hand, it creates a closer link between private crypto issuers and state debt policy. The larger the sums, the louder the call for oversight and regulation. Short-term US Treasuries still dominate as the preferred form of reserve. Alternative collateral models are being discussed, but government bonds remain the core from a regulatory perspective. This turns what is essentially a crypto product into a systemically relevant factor for traditional markets.
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Whether stablecoins will actually save the US from the debt spiral remains to be seen. What is clear, however, is that digital dollars have long been more than just technical toys. They are evolving into a financing instrument with geopolitical significance. And while Washington issues billions in new debt, the crypto industry of all things could become its most reliable buyer. (mck)
