Coinbase’s latest report forecasts the stablecoin market expanding nearly fivefold, reaching $1.2 trillion by 2028.
The research, published August 21, highlights stablecoins’ growing role in U.S. debt markets and the broader global financial system.
Stablecoins’ influence on Treasury demand
Stablecoins such as those issued by Circle and Tether are typically backed by short-term U.S. government securities.
According to Coinbase, if current growth trends persist, issuers could need to acquire approximately $5.3 billion in Treasury bills each week.
This heightened demand may shave two to four basis points off three-month Treasury yields, a notable impact in the $6 trillion money market where minor moves affect borrowing costs for institutions.
Coinbase also cautioned about potential risks.
The report modeled an event where a $3.5 billion outflow in under a week would force rapid Treasury sales, potentially straining market liquidity.
Regulatory developments and risk controls
The report underscores how new regulation, including the GENIUS Act, is set to shape the sector.
The GENIUS Act, taking effect in 2027, requires stablecoin issuers to maintain full reserves, submit to independent audits, and provide bankruptcy protections to holders.
Coinbase analysts noted:
“The framework should reduce the chance of destabilizing runs.”
However, the law stops short of granting stablecoin issuers access to Federal Reserve liquidity, maintaining a degree of separation from traditional banking safeguards.
Stablecoins move beyond trading
Coinbase emphasized that stablecoins are now widely used as payment rails and settlement tools, not just for trading.
As adoption compounds, their influence could further alter U.S. government debt market dynamics, extending well beyond the digital asset ecosystem.
