In comments delivered today at the Treasury Market Conference, held at the Federal Reserve Bank in New York, Secretary of the Treasury Scott Bessent speculated about the looming growth of the stablecoin market.
“Payment Stablecoins,” as defined under the GENIUS Act, are expected to boost global demand for the dollar and for treasury bills.
Bessent said they are closely monitoring the stablecoin market, alongside money market funds, with the stablecoin market currently valued at around $300 billion. He believes the stablecoin market could grow 10X to $3 trillion by the end of the decade—just a few years away.
“As money market funds and stablecoins grow, so too will the demand for Treasury bills,” stated Bessent.
“In addition to growing demand for Treasury bills from money market funds and stablecoin providers, we are witnessing increased demand from banks as they shake off the excessive oversight that held them back. Since the start of this year, bank portfolios have expanded their Treasury holdings. Additional reforms, including the potential eSLR reform I mentioned earlier, could further accelerate this process. As Treasury watches these trends play out, we will assess whether they are structural or temporary shifts. And we will adjust our long-term issuance plans accordingly.”
The potential for “rewards” associated with stablecoin holdings could fuel stablecoin growth.
Bessent added that “President Trump’s Golden Age” will benefit all Americans at every rung of the economic ladder.
The US dollar is the world’s reserve currency. Regulated stablecoins should make it easier for the dollar to be held internationally, even by very small accounts. In jurisdictions where inflation is rampant, the dollar is viewed as a safe harbor where you can protect value. Meanwhile, some other jurisdictions are focusing on central bank digital currencies, which may eventually undermine global demand due to privacy concerns and the potential for central manipulation.
