Standard Chartered predicts stablecoin volume will surge from $230 billion to $2 trillion by 2028 amid regulatory developments, while European officials express concerns over US dollar dominance in digital currencies.
What to Know:
- New bipartisan legislation in the US requires 1:1 asset reserves and strict compliance for stablecoin issuers
- Italy's Economy Minister warns that US stablecoin policy poses greater threat to European sovereignty than trade tariffs
- Traditional finance institutions like JPMorgan are expanding blockchain payment networks to include non-USD currencies
Regulatory Developments Drive Market Expansion
Stablecoins are poised for unprecedented growth as the United States prepares to implement new regulatory frameworks within months, according to leading financial experts. Standard Chartered's Head of Digital Asset Research Geoff Kendrick told BeInCrypto that "the volume of stablecoins outstanding is set to explode after the US passes legislation in a few months from now."
The growth projections are staggering. Kendrick forecasts stablecoin circulation will increase nearly tenfold from its current $230 billion to $2 trillion by the end of 2028.
This expansion will necessitate an additional $1.6 trillion in US Treasury bills to be held as reserves, which Kendrick notes would consume "all of the planned new Treasury bill issuance over that period."
These developments come as two significant legislative initiatives advance in the US. The bipartisan GENIUS Act aims to establish a federal framework that balances innovation with consumer protection by mandating 1:1 asset reserves, transparency requirements, and anti-money laundering compliance for issuers. Complementing this approach, the STABLE Act reinforces these guardrails with stringent reserve rules and audit requirements to ensure stability and build consumer trust.
The regulatory clarity has attracted attention beyond American borders, particularly in Europe where officials express mounting concerns. Italy's Economy Minister Giancarlo Giorgetti, speaking at a financial forum in Milan, acknowledged the utility of stablecoins while raising alarms about their implications for European monetary sovereignty.
"The general focus these days is on the impact of trade tariffs. However, even more dangerous is the new US policy on cryptocurrencies and in particular that on dollar-denominated stablecoins," Giorgetti warned.
His comments reflect growing anxiety that dollar-backed digital currencies could undermine the euro's position as a global reference currency.
European Response and Traditional Finance Adaptation
Giorgetti urged European Union leaders to accelerate development of the digital euro as a counterbalance to the growing influence of dollar-denominated digital assets.
"Stablecoins give savers the opportunity to invest in risk-free assets and a widely accepted means of payment without needing a US bank account. Its appeal for people of the Eurozone should not be underestimated," he cautioned.
The Italian minister's concerns highlight a broader geopolitical dimension to the stablecoin boom. As the US Securities and Exchange Commission moves to exempt certain stablecoins from securities regulation—provided they meet strict standards—traditional financial institutions are positioning themselves to capitalize on the evolving landscape.
JPMorgan Chase has expanded its blockchain-based Kinexys payments network to include British pound accounts, following recent euro integrations. This strategic move addresses a significant imbalance in the current stablecoin market, where over 95% of tokens are denominated in US dollars. By diversifying its currency offerings, the banking giant aims to establish itself as a key infrastructure provider for blockchain-based settlements beyond dollar-denominated transactions.
The developments in stablecoin regulation and adoption coincide with other significant movements in the crypto market. Bitcoin funds have begun attracting new capital after a week-long lull, with BlackRock's IBIT leading inflows at $36.72 million on Monday. Meanwhile, Ethereum has gained traction among retail investors despite ongoing ETF outflows, and XRP's 8% price increase has raised the possibility of significant liquidations in the future.
Political factors may also influence the trajectory of digital assets in the United States. The Trump administration is reportedly interviewing candidates to replace Jerome Powell as Federal Reserve Chair and considering using tariff revenues to fund a national Bitcoin reserve, signaling a potential shift toward greater integration of digital assets in national financial strategy.
However, not all countries are moving in the same direction—Bolivia recently reversed its decision to use cryptocurrency for fuel imports, citing a return to dollar-based transactions amid energy sector instability.
Broader Market Implications
The stablecoin expansion occurs against a backdrop of record global liquidity in April 2025, with gold surging past $3,200 while Bitcoin remains 30% below its all-time high. This divergence suggests opportunities for growth in digital assets as regulatory clarity improves.
Crypto-related equities show modest pre-market gains, with Galaxy Digital Holdings leading at 3.47% growth, followed by Marathon Holdings at 1.08%. Other companies including MicroStrategy, Coinbase Global, Riot Platforms, and Core Scientific show smaller pre-market increases ranging from 0.26% to 0.99%.
Final Thoughts
The anticipated explosion in stablecoin volume represents a watershed moment for digital assets, potentially reshaping global finance. As regulatory frameworks mature in the United States, the implications extend far beyond American borders, challenging traditional currency dynamics and prompting responses from international financial authorities. The coming months will likely determine whether this projected growth materializes and how effectively global markets adapt to the changing landscape of digital currencies.