How stablecoin growth is feeding demand for U.S. govt debt

Stablecoins have become one of crypto’s largest categories. User counts have surged past 200 million, on-chain volumes are set to climb further, and the flow of dollars is becoming hard to ignore.

Behind the scenes, these tokens are doing more. Here’s the rundown!

A new milestone for stablecoins

Global Stablecoin Holders have pushed past 200 million, rising over the past two years, per data from Token Terminal. What began as a niche trading tool has become widely used, spreading across payments, remittances, and savings.

Source: Token Terminal

This is pure, utility-driven growth.

More users are adopting stablecoins as digital cash, so the scale of value moving on-chain is expanding everyday.

According to recent data, Ethereum hosted roughly 60% of all Stablecoin Supply, even as newer players compete for market share.

Ethereum [ETH] dominance has eased over time, but Total Stablecoin Supply expanded much faster.

Source: Token Terminal

Over the next three years, another $1.7 trillion+ in stablecoins is expected to move on-chain. Even if Ethereum’s share gradually falls to 50%, the network would still absorb about $850 billion in new stablecoin supply by 2028.

A smaller slice of a much larger pie still translates into massive growth.

This growth has consequences beyond crypto

As Stablecoin Supply expands, issuers need safe, liquid assets to back their tokens and maintain trust. That is why U.S. Treasury bills have become the reserve of choice.

The data below showed a crowded field of stablecoin issuers (many operating outside frameworks like GENIUS Act). And yet, the reserve logic is the same across the board.

Source: Token Terminal

Each new dollar of stablecoin typically requires a matching dollar in low-risk USD assets. At scale, that turns stablecoin growth into a clear source of demand for short-dated Treasuries.

What looks like a crypto network is becoming a buyer of U.S. government debt.