By 
By IT Edge News.Africa
Stablecoins are rapidly moving from the fringes of cryptocurrency into the core infrastructure of global finance, with their growing demand for US government debt potentially reshaping the Treasury market and the wider international financial system.
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Nigel Green, CEO of global financial advisory organisation deVere Group, says the explosive growth of dollar-backed stablecoins should now be attracting the attention of central banks, finance ministries, commercial banks and institutional investors.
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His warning comes as the total stablecoin market capitalisation approaches a record US$318 billion, driven largely by Tether’s USDT, with more than US$184 billion in circulation, and Circle’s USDC, which has surpassed US$78 billion.
The numbers, Green argues, tell only part of the story.
The more consequential development is what stablecoin issuers do with the dollars backing their tokens—and increasingly, those dollars are being channelled into short-term US government securities.
From Crypto Experiment to Financial Infrastructure
Stablecoins were initially designed to solve one of cryptocurrency’s most persistent problems: volatility.
Unlike Bitcoin and other cryptocurrencies whose prices can swing dramatically, stablecoins such as USDT and USDC are designed to maintain a value of approximately one US dollar.
But their role is rapidly expanding.
Green argues that stablecoins have evolved from a cryptocurrency niche into an important component of the dollar-based financial system.
“Stablecoins have gone from a crypto curiosity to a genuine pillar of the dollar system.”
The transformation is significant because stablecoin reserves increasingly interact directly with traditional financial markets.
Every dollar entering a dollar-backed stablecoin system must ultimately be held or invested somewhere. A growing proportion is being placed in highly liquid, short-duration US government debt.
That makes stablecoin issuers increasingly important participants in the Treasury market.
Stablecoins Become Major Buyers of US Treasuries
Tether, the issuer of USDT, has accumulated more than US$100 billion in US Treasury bills, according to Green.
He argues that this scale places the stablecoin industry among the world’s largest external holders of US government debt.
The significance goes beyond the cryptocurrency sector.
US Treasuries are a foundational component of global finance, serving as a benchmark for interest rates, collateral for financial transactions and a major reserve asset for institutions and governments.
As stablecoin adoption expands, the industry could therefore become an increasingly important source of demand for US government securities.
Market Could Reach $2 Trillion by 2028
The potential scale of that transformation is attracting increasingly ambitious forecasts.
One major global bank has projected that the stablecoin market could reach approximately US$2 trillion by 2028.
The US Treasury has also modelled growth of roughly 700% towards a similar market size over the same period, while another major banking institution has outlined an upper-end scenario in which stablecoins could reach US$4 trillion by 2030.
If even a portion of those projections materialises, the implications for financial markets could be substantial.
Green argues that each additional trillion dollars flowing into stablecoins could represent a corresponding increase in demand for short-dated government securities.
“Every trillion dollars of stablecoin growth is a trillion dollars of fresh appetite for short-dated government paper.”
That dynamic could become particularly important as governments in advanced economies face persistent fiscal deficits and rising borrowing requirements.
The Real Opportunity May Be Around Stablecoins
Despite the explosive growth in stablecoin market capitalisation, Green cautions investors against viewing the tokens themselves as conventional speculative assets.
Stablecoins are specifically designed to maintain their value rather than generate capital appreciation.
“Stablecoins are built to stay exactly at one dollar, not to make anyone rich.”
For investors and businesses, he says, the larger opportunity may lie in the infrastructure being created around stablecoins.
That includes issuers, payment platforms, custodians, financial institutions, compliance providers, settlement systems and other companies building the infrastructure required to move money through blockchain-based networks.
As stablecoins become more widely integrated into payments and financial services, these supporting businesses could become increasingly important to the evolution of digital finance.
Global Banks Begin Building Their Own Infrastructure
The growing institutional interest in stablecoins is also changing the relationship between traditional banks and the cryptocurrency sector.
Green points to moves by major global banks to develop a joint dollar stablecoin venture as evidence that established financial institutions are increasingly moving from observing the sector to participating directly in its infrastructure.
The development comes as US regulators move towards establishing a clearer regulatory framework for stablecoin issuers under the GENIUS Act.
For Green, the involvement of major banks represents a turning point.
“When banks stop fighting a trend and start building infrastructure for it, that’s usually the surest sign the trend has already won.”
The shift could accelerate stablecoin adoption by bringing the technology closer to established banking, payments and settlement networks.
A New Source of Demand for Government Debt
The most significant consequence of stablecoin growth may ultimately have little to do with cryptocurrency prices.
Instead, it could be the emergence of a new, potentially multi-trillion-dollar buyer of government debt.
Governments across developed economies are already grappling with large fiscal deficits and rising debt-servicing costs. At the same time, investors have become increasingly sensitive to the yields required to hold government securities.
Against this backdrop, a rapidly expanding stablecoin sector could introduce a new structural source of demand for short-term government paper.
Green believes this development could represent one of the more important changes in the underlying mechanics of global debt markets in a generation.
Why Regulators and Central Banks Are Paying Attention
The rise of stablecoins presents both opportunities and challenges for policymakers.
On one hand, regulated stablecoins could make cross-border payments faster, cheaper and more accessible while supporting new forms of digital financial infrastructure.
On the other, their rapid expansion could increasingly influence traditional financial markets, liquidity conditions, bank deposits and the demand for government securities.
This makes regulation increasingly important.
The challenge for governments is to create rules that protect consumers and financial stability without unnecessarily restricting innovation.
As stablecoins move billions of dollars through digital networks and accumulate significant holdings of traditional financial assets, their regulation is no longer simply a question for cryptocurrency policymakers.
It is becoming a mainstream financial-policy issue.
Stablecoins and the Future of Global Finance
The extraordinary growth of stablecoins points to a broader transformation underway in the international financial system.
What began as a mechanism for traders to move value within cryptocurrency markets is increasingly becoming a bridge between blockchain networks and conventional finance.
The implications could be particularly profound for payments, remittances, cross-border commerce, treasury management and digital financial services.
For developing economies, stablecoins could also become an important part of the debate around dollarisation, monetary sovereignty and access to international financial markets.
For major economies, meanwhile, their growing Treasury holdings could give stablecoin issuers an increasingly influential position in the global financial system.
As Green puts it, the headline market-cap figures are only the surface.
The more important question is how quickly regulators, banks and governments adapt to the emergence of a digital financial ecosystem capable of becoming a major buyer of government debt.
Stablecoins may have started in crypto.
But increasingly, their future is being written in the broader architecture of global finance.
