New projections from Coinbase suggest that the stablecoin sector could swell to $1.2 trillion by 2028.
Yet, this explosive growth raises questions about the ripple effects on US Treasury yields and global liquidity.
Coinbase Models $1.2 Trillion Stablecoin Market by 2028
The forecast comes as the stablecoin market progressively becomes one of the most critical battlegrounds in global finance.
Coinbase Head of Research David Duong outlined the firm’s methodology, leveraging 20,000 Monte Carlo simulations based on an autoregressive process (AR(1)) to forecast growth.
Based on the team’s findings, stablecoins could leap from the current $275 billion market capitalization to $1.2 trillion in just three years.
“This isn’t a ‘finger in the air’ forecast…Growing from $275 billion today to $1.2 trillion implies roughly $925 billion of net US Treasury issuance over approximately 175 weeks—or about $5.3 billion per week,” Duong explained.
Beyond highlighting the mainstreaming of stablecoins, such a trajectory displays their growing role in shaping global financial stability.
Experts React Amid Expected Pressure on Treasury Yields
Coinbase’s model suggests that a $3.5 billion inflow into stablecoins could compress three-month Treasury bill yields by two basis points (bps) within 10 days and as much as four bps within 20 business days.
This is because stablecoin issuers (like Circle and Tether) typically use a large portion of their reserves to buy short-term US
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Author: Lockridge Okoth
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