Coinbase Predicts Stablecoin Market Will Grow 5 Times to $1.2 Trillion by 2028
Stablecoins Could Reach $1.2 Trillion by 2028, Impacting U.S. Debt Markets
A new Coinbase report says the stablecoin market could grow almost five times, from $270 billion today to $1.2 trillion by 2028. This growth could start affecting U.S. debt markets.
How Stablecoins Work
Stablecoins are digital tokens usually tied to the U.S. dollar. Companies like Circle and Tether back these tokens with short-term government securities.
If the market grows as predicted, stablecoin issuers might need to buy about $5.3 billion in Treasury bills each week. This extra demand could slightly lower the yield on three-month Treasuries by 0.02%–0.04%. While small, this shift can influence borrowing costs in the $6 trillion money market.
Coinbase also warned that sudden large redemptions could force issuers to sell Treasuries quickly, which could strain short-term debt liquidity. For example, a $3.5 billion outflow in less than a week could cause rapid Treasury sales.
Regulation and Safety Measures
Stablecoin growth will be shaped by new rules like the GENIUS Act, which starts in 2027. The law requires issuers to:
- Keep full reserves
- Undergo independent audits
- Protect token holders in case of bankruptcy
Although stablecoin providers won’t have access to Federal Reserve liquidity, these rules could make the market safer and encourage traditional financial institutions to participate.
Beyond Crypto Trading
Stablecoins are increasingly used for payments and settlements, not just trading. As adoption grows, they could significantly influence U.S. government debt markets, not just digital assets.
