US Treasury Predicts Stablecoin Market to Reach $2T by 2028

The US Treasury expects the stablecoin market to reach $2 trillion by 2028, according to its Q1 2025 report.

The US Treasury is bullish on the prospects of the stablecoin market, especially with new regulations on the horizon. According to the Q1 2025 report by the Treasury Borrowing Advisory Committee (TBAC), the Treasury expects the stablecoin market to reach $2 trillion by 2028.

This projection considers the changing market structures, new regulatory incentives, and persistent strong demand for dollar-pegged digital assets.

As of April 2025, the total stablecoin market cap stands at about $234 billion. The Treasury noted that 99% of this market is dominated by USD-pegged stablecoins.

The projected increase to $2 trillion would represent an eightfold rise within three years.

New regulatory expectations would require stablecoin issuers to hold reserves in short-term US Treasury bills. This factor would tie the expansion of stablecoins more directly to the US debt market and T-bill demand.

The TBAC report is prepared by a committee of financial experts who provide advice to the Treasury on government borrowing. The report's findings are regularly used by the administration in making key financial decisions.

Earlier this year, the House Financial Services Committee voted to advance a bill that would create a new regulatory framework for stablecoins.

The bipartisan legislation, known as the "Stablecoin TEFRA" bill, would place stablecoin issuers under the supervision of the Federal Reserve and require them to maintain full capital reserves in short-term US Treasury bills or other high-quality debt.

It is still unclear when the Senate will vote on the bill.

Tether Plans US-Only Stablecoin by 2026

In a recent development, Tether CEO Paolo Ardoino confirmed that the firm is discussing the launch of a US-only stablecoin.

The new product could be released by the end of 2025 or in early 2026, depending on regulatory progress.

“We are just exporters of what we believe to be the best product the United States ever created—that is, the US dollar,” Ardoino said in an interview.

Tether is the issuer of USDT, the largest stablecoin with over 60% market share.

This announcement follows reports that the Trump administration is considering ways to use stablecoins as financial tools for expanding US influence in crypto markets.

As of April 2025, the total crypto market cap stands at around $2 trillion.

The administration is also expected to make a decision soon on a proposed stablecoin. Earlier this year, the House Financial Services Committee voted to advance a bill that would create a new regulatory framework for stablecoins.

The bipartisan legislation, known as the "Stablecoin TEFRA" bill, would place stablecoin issuers under the supervision of the Federal Reserve and require them to maintain full capital reserves in short-term US Treasury bills or other high-quality debt.

It is still unclear when the Senate will vote on the bill.

However, the House bill faces an uphill battle in the Senate, where Democrats are expected to push for stricter regulations on stablecoins.

USDT Market Cap Surges Ahead of US Dollar Supply

A chart from TradingView compared the market cap of USDT with the US dollar in circulation.

The USDT supply (blue line) has grown rapidly since November 2023. In contrast, the US currency in circulation (red line) has remained nearly flat throughout this period.

The data shows the staggering increase in USDT, highlighting the strong demand for dollar-pegged stablecoins in digital finance.

The chart highlights the rapidly growing role of stablecoins in the new digital economy.