US Stablecoin Regulation Predicts $2 Trillion Market by 2028 – Coincu

Standard Chartered Bank’s recent analysis forecasts that US stablecoin market will expand from $230 billion to $2 trillion by 2028, largely driven by the impending GENIUS Act.

Standard Chartered’s Geoffrey Kendrick states the GENIUS Act will bolster stablecoin legitimacy and influence major Treasury acquisitions. Currently, Circle invests 88% of its USDC reserves in short-term Treasuries, a likely industry standard.

US Legislation Spurs Treasury Bond Market Shifts

The GENIUS Act, supported by US legislators, prominently including Senator Bill Hagerty and Senator Cynthia Lummis, proposes robust guidelines for the stablecoin industry. Circle’s CEO Jeremy Allaire has already aligned USDC reserves with the Act’s anticipated norms.

The legislation mandates that stablecoin reserve assets have terms not exceeding 93 days, compelling a shift toward short-term Treasury investments. Such regulations are predicted to catalyze a cumulative $1.6 trillion purchase of US Treasury bonds over four years. Stablecoin issuers and the US Treasury market brace for significant changes.

Geoffrey Kendrick of Standard Chartered remarks, “Expect a consolidated US dollar status in the short term, challenged possibly by other currency-backed stablecoins eventually.” This aligns with insights that Senate advances legislation impacting stablecoin debanking issues.

Projected Growth and Market Dynamics by 2028

Did you know? In a historical precedent, the EU MiCA regulation influenced similar stablecoin laws, shaping GENIUS to protect and integrate digital assets in financial systems, akin to Europe’s framework.

Today’s USDC stands at $1.00, exhibiting minor fluctuations in the recent quarter as observed in today’s CoinMarketCap listing. With a $60.39 billion cap and trailing 24-hour volume of $9.67 billion, USDC remains a strong market contender, reflecting minimal negative variance.

Analysis by Coincu indicates the GENIUS Act will consolidate US dollar dominance, although future expansion of non-USD stablecoins might prompt market shifts. Circle’s model for reserves, focusing on short-term Treasuries, sets an industry trend.