A fundamental shift in how the United States government finances its debt is underway as stablecoin issuers evolve into some of the world’s largest purchasers of Treasury bills (T-bills). According to new research from Standard Chartered, the rapid expansion of the digital asset market could create a “scarcity” of short-term government debt, potentially forcing the U.S. Treasury to overhaul its borrowing strategy. The Block reports.
Analysts led by Geoffrey Kendrick, global head of digital assets research, and John Davies, U.S. rates strategist, project the stablecoin market capitalization will hit $2 trillion by the end of 2028.
This growth – largely driven by emerging markets – is expected to generate between $800 billion and $1 trillion in new demand for T-bills. Under the regulatory framework of the GENIUS Act passed in July 2025, issuers are required to back their tokens with high-quality liquid assets, primarily short-dated Treasurys.
“Stablecoin issuers are becoming the biggest buyers of U.S. T-bills,” the analysts wrote, noting that this demand, combined with Federal Reserve management purchases, could create a $900 billion shortfall in available T-bills over the next three years.
To meet this insatiable appetite for short-term debt, Standard Chartered suggests the U.S. Treasury may need to reduce its issuance of long-dated notes and bonds.
The bank’s calculations indicate that shifting $900 billion from the “long end” of the curve into T-bills could theoretically allow the Treasury to suspend 30-year bond auctions for up to three years. While a similar pause occurred between 2002 and 2006, the current fiscal environment is significantly more challenged, with deficits hovering between 5% and 6%.
Treasury Secretary Scott Bessent recently signaled an openness to this shift, testifying in February that the GENIUS Act could become “an important feature of financing the U.S. government.”
