Goldman Sachs (NYSE:GS) expects the global stablecoin market to expand into the trillions of dollars in the coming years, a forecast that underscores Treasury Secretary Scott Bessent's efforts to position the sector as a major buyer of US government debt.
What Happened: Stablecoins, digital tokens typically pegged to the US dollar and backed by safe assets such as Treasury bills, currently account for about $250 billion in circulation.
Goldman analysts and other market observers see that figure rising dramatically as adoption accelerates, potentially reshaping both crypto markets and traditional finance, The Financial Times reported on Wednesday.
Bessent has taken note.
According to people familiar with the matter, he has engaged directly with leading stablecoin issuers, including Tether (CRYPTO: USDT) and Circle (NYSE:CRCL), to better understand their holdings and capacity for absorbing short-term Treasuries.
The outreach is informing Treasury's plan to lean more heavily on bill issuance in the coming quarters.
"Stablecoins will be a real source of new demand for Treasuries," said Jay Barry, head of global rates strategy at JPMorgan Chase, one of the largest dealers in the US government bond market.
He added that the expectation of crypto-linked demand is one reason officials feel more comfortable tilting issuance toward short-term debt.
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Why It Matters: The move comes at a time when Washington's fiscal outlook is under increasing strain.
Independent projections suggest America's debt-to-GDP ratio could reach record highs within the next decade, driven by persistent deficits and recently enacted tax policies.
Treasury officials, aware of those pressures, have ramped up outreach to banks, hedge funds, and asset managers, seeking reassurances about market demand.
The policy shift also follows the passage of the Genius Act in July, which established a regulatory framework requiring stablecoins to be backed by ultra-safe assets such as Treasury securities.
Treasury officials said the law should help "promote innovation in stablecoins and grow demand for short-term Treasury securities."
While the stablecoin sector remains modest compared to the $29 trillion US Treasury market, Goldman Sachs' projection that it could expand into the trillions highlights its potential to become a structural player in sovereign debt markets.
For Bessent, that presents both an opportunity and a necessity, turning a once-controversial corner of crypto into a pillar of America's borrowing strategy.
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