Coinbase Says Stablecoins May Quadruple To $1.2T By 2028

US crypto exchange Coinbase predicts the stablecoin market could more than quadruple by 2028 to reach $1.2 trillion.

In an Aug. 21 report called ”New Framework for Stablecoin Growth,” Coinbase said the sector’s growth will be ”underpinned by an improving policy landscape and accelerating adoption trends.” The sector’s market capitalization stands at $288.39 billion now, according to CoinMarketCap. 

Coinbase said the stablecoin market has grown at a compound annual growth rate of approximately 65% since 2021. The average adjusted transaction volumes have also surged to $15.8 trillion for the seven months through July 31, up from $10.3 trillion over the same period in 2024, the report said.

Surging Stablecoin Demand Will Not Push US Treasury Yields Down Much

As stablecoins grow, issuers’ demand for US Treasury bills will soar as well. Coinbase projects that the Treasury will need to issue around $5.3 billion of new short-term debt every week for three years straight just to cater to the demand.

Private stablecoin issuers like Tether and Circle have already become the top buyers of US government debt, even eclipsing countries like South Korea, the United Arab Emirates (UAE), and Germany, the report noted. 

Stablecoins already hold more U.S. Treasuries than Germany—the third-largest national economy in the world. pic.twitter.com/th1WryeKch

— Bitwise (@BitwiseInvest) August 22, 2025

Tether’s USDT and Circle’s USDC are currently the largest stablecoins by market cap, and the two of them alone “have been the seventh largest buyers of US treasuries in 2025 YTD through June 30,” Coinbase wrote.

Largest stablecoins by market cap (Source: CoinMarketCap)

Some analysts have expressed concerns that the demand from stablecoins will push Treasury yields down much lower, essentially making government borrowing cheap. 

But Coinbase argues that while the stablecoin demand will push yields down, it will only lower 3-month Treasury yields by around 4.5 basis points (0.045%).

“Our baseline estimates suggest the impact on 3-month T-bill yields is small in week 1 and grows through weeks 2-3 before tapering off,” Coinbase wrote.

“We think the forecast doesn’t require unrealistically large or permanent rate dislocations to materialize; instead, it relies on incremental, policy-enabled adoption compounding over time,” the exchange added. 

Coinbase also mentioned the July signing of the GENIUS Act, which the exchange believes “could reduce the risk that large redemptions will turn into a cascade of forced T-bill selling.”

Other Countries Forced To Consider Legalizing Their Own Stablecoins

USD-pegged stablecoins have dominated the market thus far, but the signing of the GENIUS Act has forced other countries to consider legalizing their own stablecoins to remain competitive with the US in the digital currency race. 

As such, South Korea’s Financial Services Commission (FSC), a government regulator, announced that a comprehensive stablecoin regulatory bill will be submitted to the country’s legislature in October. 

China has also pivoted from its long history of opposing cryptocurrencies and privately issued money when it reportedly signaled that it may allow stablecoins backed by the Yuan to begin circulating in the market. 

However, the rollout of any yuan-backed stablecoins would likely be limited to special economic zones, analysts say.

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