Stablecoins Could Force Treasury to Suspend 30-Year Bond Sales

What happens when private digital tokens become one of the U.S. government's biggest creditors? We're about to find out.

Standard Chartered projects that stablecoins will gobble up $1 trillion worth of Treasury bills by 2028, creating a supply crunch so severe that the Treasury might have to suspend 30-year bond auctions for three years.

The Stablecoin Appetite for Government Debt

Today's $320 billion stablecoin market looks modest, but if it hits $2 trillion by 2028 as Standard Chartered expects, the math gets interesting fast. Stablecoin issuers like Tether and Circle back their tokens with short-term government debt, meaning they'd need to buy $800 billion to $1 trillion in T-bills as reserves.

Add the Federal Reserve's projected $1-1.2 trillion in purchases, and total T-bill demand could reach $2.2 trillion through 2028. The problem? Net new supply is expected to be only $1.3 trillion, leaving a potential $900 billion shortfall.

Tether alone already holds T-bills rivaling mid-sized countries. As crypto trading volumes surge, these digital dollar proxies are becoming accidental kingmakers in U.S. debt markets.

Treasury's Nuclear Option

Treasury Secretary Scott Bessent has options, but they're dramatic. Standard Chartered suggests boosting T-bill issuance by 2.5 percentage points over three years, which would create that missing $900 billion in supply.

The trade-off? Suspending 30-year bond auctions entirely for three years. This would effectively reshape the yield curve, potentially keeping long-term rates from spiraling upward as the government shifts toward shorter-duration debt.

The Treasury's February Quarterly Refunding Announcement already noted it's "monitoring growing demand for Treasury bills from the private sector" – bureaucratic speak for "we see what's happening."

When Crypto Volatility Meets Government Finance

There's a catch: stablecoin growth has stalled as bitcoin crashed 50% from its $126,000 October 2025 peak. Trading-driven demand for stablecoins evaporated along with crypto euphoria.

But Standard Chartered views this as cyclical noise. When the next crypto boom arrives – and history suggests it will – stablecoin issuers will need those Treasury reserves fast.