Stablecoins shape debt demand and policy

A Goldman Sachs report and related policy moves point to stablecoins boosting demand for U.S. Treasuries

Goldman Sachs sees stablecoins fueling a trillion-dollar market

U.S. Treasury Secretary Scott Bessent signaled that stablecoins backed 1:1 by U.S. dollar instruments could become a meaningful source of demand for U.S. Treasuries. He cited plans around the GENIUS Act to align stablecoin regulation, providing clarity for a growing industry.

Goldman Sachs researchers estimate the global stablecoin market at 271 billion dollars and see USDC share growth of about 40 percent per year through 2027. They argue the market could extend into the trillions as payments expand beyond crypto trading. The BIS study notes that inflows into stablecoins can modestly lower 3 month Treasury yields, while outflows push yields higher. UBS, however, remains skeptical that stablecoins will change overall demand for U.S. debt, arguing the move mostly redistributes money within the system.

From a policy angle, the idea links financial innovation with government debt dynamics. If regulators give firms a clear path, stablecoins could push more dollars through the bond market. The risk is how quickly such a system can scale and how it will handle cross border use and consumer protection.

Market reality may lag forecasts. Even with optimistic numbers, the true impact depends on trust, exchange access, and actual uptake. The article cites credible voices but leaves open how big the effect will be on long term debt costs and the balance between short and long term Treasuries.

Highlights

Watch how regulators balance innovation with stability in the coming months.