Stablecoin Adoption Seen as Catalyst for Treasury Bill Demand
Stablecoins could reach a $2 trillion market cap by 2028, according to the U.S. Department of the Treasury’s Q1 2025 report, signaling a major shift in how digital dollars are integrated into the global financial system.
The report, published on April 30, notes that while stablecoins currently have a combined market capitalization of around $230 billion, “evolving market dynamics have the potential to accelerate stablecoins’ trajectory” toward the $2 trillion milestone.
“Stablecoins are already ubiquitously utilized as ‘cash on-chain,’ effectively serving as a new payment mechanism,” the Treasury said.
Tokenized Money Market Funds Enter the Picture
The report also highlighted the rise of tokenized money market funds, which are becoming attractive alternatives to stablecoins due to their yield-bearing structure. While stablecoins function as digital cash, tokenized funds offer interest income, giving users more options for storing value on-chain.
This convergence of blockchain and traditional finance aligns with the Treasury’s pro-innovation stance under President Donald Trump, who began his second term in January 2025.
In a separate statement issued in December 2024, the Treasury praised crypto’s potential to create a “new financial market infrastructure” and pointed out that US dollar-pegged stablecoins like USDT and USDC already invest their reserves in short-term Treasury instruments.
“Because most stablecoin collateral consists of Treasury bills or Treasury-backed repurchase agreements, stablecoin growth has likely contributed to rising demand for short-dated Treasury securities,” the Treasury reiterated.
Regulatory Framework to Reinforce U.S. Dollar Dominance
The April report added that pending stablecoin legislation would likely mandate the use of short-term Treasurys for collateral, further tightening the connection between stablecoin adoption and U.S. public debt markets.
In turn, this could offer new monetary policy levers, as stablecoin growth may impact bank deposit rates, forcing traditional banks to offer more competitive yields to retain customers.
“The proliferation of stablecoins may put upward pressure on retail bank interest rates,” the report noted.
Market Landscape: USDT Leads, USDC Follows
According to Nansen, as of April 25, Tether’s USDT remains the dominant stablecoin, with 66% market share and a market cap nearing $150 billion, per CoinGecko data.
Circle’s USDC is second, with a market cap of around $60 billion as of April 30.
Final Thoughts: Stablecoins Poised to Reshape Global Liquidity
The U.S. Treasury’s projections mark a significant endorsement of stablecoins as a critical component of future monetary infrastructure. With legislative clarity on the horizon and the financial incentives of Treasury-backed collateral, stablecoins are likely to become a core pillar of global liquidity.
As the market grows toward the $2 trillion threshold, the implications for decentralized finance, monetary policy, and cross-border payments could be profound — solidifying the U.S. dollar’s dominance while pushing blockchain integration deeper into the financial system.
