The overall market for US dollar-pegged stablecoins is anticipated to reach $1.2 trillion by 2028, driven by extensive cryptocurrency regulations in the United States, as reported by crypto exchange Coinbase.
Coinbase stated that these projections imply a necessity for the US Treasury to issue $5.3 billion weekly over the next three years to meet the needs of stablecoin issuers, who rely on short-term US Treasury bills as collateral for their digital fiat tokens.
This issuance plan would lead to a slight, temporary dip in three-month Treasury yields, approximately 4.5 basis points (BPS), contrary to analyst expectations that stablecoin issuer demand will markedly decrease interest in US government debt. Coinbase remarked:
“We believe the forecast doesn’t necessitate unrealistically large or permanent rate disruptions to occur; rather, it depends on gradual, policy-enabled adoption accruing over time.”
The introduction of the GENIUS bill, a wide-ranging regulatory framework for stablecoins in the US scheduled to take effect in January 2027, is viewed as a key driver for the stablecoin market’s expansion, according to Coinbase.
However, the regulatory landscape in the US has compelled other nations to contemplate legalizing their own stablecoins in a bid to stay competitive with the dollar in the digital era.
Related: US Treasury requests public input on GENIUS stablecoin bill
Growth in the stablecoin sector as countries indicate they are entering the fray
Private stablecoin providers like Tether and Circle have emerged as leading purchasers of US government debt, surpassing countries such as South Korea, the United Arab Emirates (UAE), and Germany.
While dollar-denominated stablecoins have so far dominated the market, other nations are now investigating stablecoins as a complement to their existing fiat currencies.
South Korea’s Financial Services Commission (FSC) has indicated that a comprehensive regulatory bill for stablecoins will be introduced to the legislature for consideration in October.
The government of China, long opposed to cryptocurrencies and privately issued currencies, is reportedly indicating that it may permit yuan-backed stablecoins to circulate in the market.
Experts and industry leaders suggest that any introduction of a yuan stablecoin would likely be restricted to designated economic zones in China, such as Hong Kong, and international currency markets.
Magazine: Stablecoins in Japan and China, India considers crypto tax revisions: Asia Express
