Overview

The potential size of the stablecoin market could begin to alter the landscape of U.S. Treasury markets and monetary policy once it reaches approximately $750 billion, as noted by Geoff Kendrick, head of digital assets research at Standard Chartered.

Key Insights

• Kendrick estimates that the stablecoin market, currently valued at about $240 billion, will more than triple by the end of 2026 due to new issuers and legislative changes, particularly the GENIUS Act.
• A 540% surge in stock prices of Circle since its IPO highlights the increasing influence of stablecoins in digital finance.

Detailed Analysis

Kendrick shared insights following his recent tour in Washington, New York, and Boston, where he found a consensus among financial experts and policymakers that reaching the $750 billion threshold could lead stablecoins to significantly impact government debt issuance and monetary policy. He stated:

“In the U.S., once the stablecoin market gets to a certain size, the amount of T-bills required to back stablecoins will likely require a shift in planned issuance.” Translation: Once the stablecoin market grows large enough, it may create a need to change how U.S. Treasury securities are issued, favoring shorter-term bonds.

The rise in demand for stablecoins, which are created to maintain a stable value (commonly pegged to the dollar), is expected to escalate the necessity for U.S. Treasury bills, leading to a transformative intersection with traditional financial markets.

Emerging markets might experience immediate effects as stablecoins attract capital away from local banks, which could threaten financial stability in countries dependent on U.S. dollar liquidity. Kendrick highlighted that the wave of stablecoin issuance is anticipated not only from traditional crypto companies but potentially from banks and local governments as well.