Stablecoin Issuers Poised to Dominate US Treasury Holdings by 2030

Citigroup has made a bold prediction that stablecoin issuers could emerge as some of the largest holders of US Treasuries by 2030. This forecast is rooted in the anticipated growth of the stablecoin market, which is projected to reach a staggering market cap of up to $3.7 trillion. As stablecoins integrate more deeply into the financial system, they are expected to transform the landscape of finance and monetary policy.

• Stablecoin market could reach between $1.6 trillion and $3.7 trillion by 2030.
• Regulatory clarity is essential for stablecoin growth and acceptance.
• Stablecoin issuers are set to hold significant portions of US Treasuries, influencing investment strategies.

The rise of stablecoins, digital currencies pegged to traditional assets like the US dollar, is reshaping how transactions are conducted. These digital assets are designed to maintain a stable value, making them ideal for faster and cheaper transactions, especially in cross-border payments. Citigroup's report highlights a rapid increase in stablecoin adoption, driven by their utility in decentralized finance (DeFi) and growing institutional interest.

According to Citigroup, the stablecoin market is on a trajectory of significant expansion. The report suggests that by 2030, stablecoin issuers could hold a substantial portion of US Treasuries, as investors seek the benefits of digital assets while enjoying the safety associated with government bonds. This shift is expected to be influenced by regulatory developments that could provide the necessary clarity and legitimacy for stablecoins.

The implications of this growth extend beyond mere investment strategies. As stablecoins gain traction, they may also influence monetary policy, prompting central banks to adapt to their increasing presence in the financial ecosystem. However, the rise of stablecoins is not without its challenges. Market volatility, regulatory hurdles, and the need for robust security measures to prevent fraud and cyber threats remain significant concerns.

As of 2025, the US Treasury market is experiencing notable volatility, with long-end yields rising due to various economic pressures. Recent data indicates that the 30-year US Treasury yield surged by 46 basis points in just one week, marking the largest increase in nearly four decades. This volatility raises questions about foreign demand for US Treasuries, particularly as large Japanese banks have begun selling off their holdings in response to rising yields.

Despite these challenges, historical data suggests that demand for US Treasuries tends to recover after yield spikes, as higher yields attract price-sensitive investors. Proposed regulatory reforms could also ease supply-demand imbalances in the Treasury market, potentially increasing demand from banks and institutional investors.

Expert Opinion and Quotes

“Stablecoin issuers are projected to become major holders of US Treasuries by 2030. The total supply of stablecoins could reach $1.6 trillion in a base case scenario and up to $3.7 trillion in a more bullish scenario.” — Source: Mitrade

“Creating a U.S. regulatory framework for stablecoin would support demand for dollar risk-free assets inside and outside the U.S. The stablecoin issuers will have to buy U.S. Treasuries, or comparable low risk assets, against each stablecoin as a measure of having safe underlying collateral.” - Source

“The issuance of stablecoins is expected to position these issuers among the biggest holders of US Treasuries by the end of the decade.” — Source: The Block

FAQ

What are stablecoins?
Stablecoins are digital currencies pegged to traditional assets, such as the US dollar, designed to maintain a stable value and facilitate faster, cheaper transactions.

How will stablecoins impact US Treasury holdings?
By 2030, stablecoin issuers are expected to hold a significant portion of US Treasuries, as investors seek the benefits of digital assets while maintaining the safety associated with government bonds.

What factors influence the growth of stablecoins?
The growth of stablecoins is influenced by regulatory clarity, increasing institutional interest, and their utility in decentralized finance (DeFi).

What are the risks associated with stablecoins?
Potential risks include market volatility, regulatory challenges, and the need for robust security measures to prevent fraud and cyber threats.

How might stablecoins affect monetary policy?
The rise of stablecoins may require central banks to adapt their monetary policies to account for their growing presence in the financial system.