The forecast, which was published on Thursday, came amid renewed interest in stablecoins from several governments around the world.
The total US dollar-pegged stablecoin market is projected to swell to $1.2 trillion by 2028, spurred on by comprehensive crypto regulations in the United States, according to crypto exchange Coinbase.
Coinbase said the projections mean the US Treasury issuance would have to be $5.3 billion per week over the next three years to satisfy demand from stablecoin issuers, who use short-term US Treasury bills as backing collateral for their digital fiat tokens.
This issuance schedule would cause a minor and temporary drop in three-month Treasury yields of about 4.5 basis points (BPS), contrary to analyst predictions that demand from stablecoin issuers will significantly reduce the interest on US government debt. Coinbase wrote:
