The stablecoin market size of "750 billion Dollars" is at a turning point in the restructuring of the US Treasury market: Standard Chartered | CoinDesk JAPAN

• The market size of stablecoins may reach approximately 750 billion Dollars (about 111 trillion 750 billion yen, based on an exchange rate of 149 yen to 1 Dollar), which could lead to changes in the structure of the U.S. Treasury market and monetary policy, according to Jeff Kendrick of Standard Chartered Bank.
• With the backdrop of new issuance companies for stablecoins and legal frameworks like the GENIUS Act, he predicts that the market size will expand from the current 240 billion Dollar (approximately 35.76 trillion yen) to over three times that by the end of 2026.
• The fact that Circle's stock price has surged by 540% since its listing highlights the increasing presence of stablecoins as the foundation of digital finance.

According to Geoff Kendrick, head of digital asset research at Standard Chartered, the restructuring of traditional finance could begin if the stablecoin market grows to about $750 billion (approximately 111.75 trillion yen).

According to Mr. Kendrick, there is a growing consensus among stakeholders in the cryptocurrency industry, fund managers, and policymakers that this figure of 750 billion Dollars will mark a turning point where stablecoins begin to influence bond issuance, monetary policy, and the structure of the U.S. Treasury market through pure demand. He stated this in a memo released on the 15th after a week-long visit to Washington, New York, and Boston.

The current stablecoin market size is approximately 240 billion Dollars (about 35 trillion 760 billion yen). However, associates of Mr. Kendrick predict that with the expansion of stablecoin usage and clarification of regulations, especially with the bipartisan GENIUS Act being enacted, it could exceed three times its size by the end of 2026. The GENIUS Act is expected to be enacted as early as next week.

"In the United States, as the stablecoin market reaches a certain scale, there is a high possibility that the issuance plan will shift towards increasing the issuance of short-term government bonds and decreasing the issuance of long-term government bonds, in line with the increase in the amount of short-term government bonds necessary to back stablecoins," Kendrick wrote. "This could affect the shape of the U.S. Treasury yield curve and the demand for Dollar assets."

Stablecoins are cryptocurrency assets designed to maintain a value usually pegged to 1 Dollar and are typically backed by reserves of cash equivalents, most of which are short-term U.S. Treasury bonds. As demand increases, the necessity to hold large amounts of U.S. Treasury bonds also rises, and stablecoins may collide with the traditional bond market.

Mr. Kendrick stated that during his visit to the United States, he met with a wide range of market participants including Bitcoin miners, crypto asset native companies, traditional hedge funds, and policy makers. Among these market participants, a nearly common concern is stablecoin.

Market participants expect that not only cryptocurrency companies but also banks and local governments may issue stablecoins one after another.

Impact on Emerging Markets

Emerging market economies may be the most directly affected. Mr. Kendrick pointed out concerns that people in these regions are using stablecoins as a means of digital savings and withdrawing funds from local banking systems and central bank reserves. This could impact the financial stability of countries that rely on the liquidity of the Dollar for managing fixed exchange rates and capital controls.

In the United States, stablecoins have the potential to shift corporate funds from traditional banks to tokenized cash alternatives. However, it remains unclear to what extent companies will move cash on-chain and how fast that transition will occur.

This growing attention is also reflected in the public markets. The stock price of Circle, the issuer of the stablecoin "USD Coin (USDC)", has surged by 540% since its listing last month. This surge demonstrates investors' confidence that stablecoins will play a central role in the next phase of digital finance.