The United States' strategy for stablecoins, following the passage of the GENIUS Act, is generating a complex tapestry of optimism and skepticism among financial analysts. While the sector has seen substantial growth, its ambitious trajectory and intended role in bolstering U.S. Treasury bill demand face critical examination regarding feasibility and potential broader implications.
The Ambitious Vision and Market Realities
The GENIUS Act, enacted last July, has fueled significant momentum in the stablecoin sector, pushing its total market supply past $300 billion. The White House envisions a dramatic expansion, targeting a $2-$4 trillion market by 2028-2030, primarily to enhance demand for U.S. short-term Treasury bills. However, this aggressive forecast is viewed with caution by some experts. JPMorgan's Head of U.S. short-duration strategy, Teresa Ho, suggests a more conservative growth to around $700 billion over the next few years, citing limitations such as the current legal ban on interest-paying stablecoins.
Stablecoins' Growing Influence on Treasury Bills
Despite differing growth projections, stablecoins are increasingly recognized for their potential to become a cornerstone in payments and a significant buyer of U.S. Treasury bonds, thereby aiding long-term fiscal debt management. Major U.S. dollar-based stablecoin issuers, notably Tether and Circle, already hold an impressive $155 billion worth of T-bills as of October 2025, representing 2.5% of total U.S. T-bills. This figure rivals the holdings of some foreign officials. Projections from S&P Global indicate these issuers could acquire an additional $50-$55 billion in T-bills by year-end, underscoring their potential to become "key marginal buyers" of short-term Treasuries if the market reaches the multi-trillion-dollar estimates. Tether, in particular, has emerged as a major player, holding $127 billion in U.S. Treasury bills by July, making it the 17th largest U.S. debt holder.
Navigating Significant Headwinds and Global Concerns
Despite their growing T-bill holdings, stablecoins' impact remains dwarfed by the overall U.S. fiscal debt, which has soared to $38 trillion. Critics, like Steven Barrow of Standard Bank, argue that while stablecoins can contribute, they are not a panacea for the nation's "yawning debt and deficits," which remains the "real concern." Furthermore, the global landscape presents considerable challenges. Countries such as China are actively cracking down on dollar-based stablecoins to safeguard their financial stability, fearing potential capital outflows. Standard Chartered projects a staggering $1 trillion in capital could flow from emerging markets into stablecoins by 2028, a prospect that heightens the risk of further bans and regulatory pushback from jurisdictions eager to protect their domestic financial systems.
