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Stablecoins Could Change the US Bond Market Forever

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Standard Chartered Stablecoin Market Cap Projection

Welcome to the US Crypto News Morning Briefing—your essential rundown of the most important developments in crypto for the day ahead.

Grab a coffee — because stablecoins may be about to reshape the US bond market. A new Standard Chartered report suggests rising demand for Treasury bills from digital dollar issuers could quietly force Washington to rethink how it finances its debt.

Crypto News of the Day: Stablecoin Demand Could Force Washington to Rethink US Debt Strategy

Stablecoins may soon reshape the US Treasury market, potentially forcing a radical shift in debt issuance, according to a new report from Standard Chartered.

The bank projects that stablecoin issuers could generate between $0.8 trillion and $1 trillion of fresh demand for Treasury bills (T-bills) by the end of 2028.

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This trend, when combined with Federal Reserve purchases, could push total short-term Treasury demand to $2.2 trillion.

The report warns that the Treasury could use this emerging excess demand as justification to increase T-bill issuance while reducing long-term bond supply. Such a move could, in effect, allow the US government to suspend all 30-year bond auctions for the next three years.

“We think the US Treasury may use this potential excess demand as a reason to issue more T-bills,” wrote Geoff Kendrick in the latest Standard Chartered report, highlighting stablecoin issuers as increasingly significant buyers of short-term US debt.

Emerging market stablecoins are expected to drive the majority of this demand. Standard Chartered estimates that two-thirds of projected T-bill demand will come from emerging markets, representing net new demand. Meanwhile, stablecoins in developed markets largely substitute for existing holdings.

This pattern highlights the growing role of digital assets in global capital flows and their influence on traditional fixed-income markets.

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The potential implications for the Treasury yield curve are substantial. Shifting roughly $9 billion from long-term bonds to T-bills could initially flatten the US Treasury curve.

Yield Curve Risks Mount as Treasury Weighs Expanding T-Bill Share

Standard Chartered notes, however, that long-term premia, fiscal deficit concerns, and market sentiment could influence investor reaction over time.

The bank cautions that a bull flattening at the front end may be the immediate response, but structural factors, including term premia and rollover risk, could shape yields differently in the longer term.

Treasury Secretary Scott Bessent could leverage this scenario to increase the share of T-bills within the overall debt portfolio.

Raising the T-bill share by just 2.5% over three years would generate roughly $900 billion of additional T-bill supply, offsetting the projected excess demand.

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This could ease scarcity at the front end of the curve while keeping the 10-year Treasury yield manageable.

The report also notes that historically, T-bills have averaged 26.1% of outstanding marketable debt. This is well above the Treasury Borrowing Advisory Committee’s recommended 15–20% range, suggesting room for an increase.

Despite short-term stagnation, stablecoin market capitalization is projected to reach $2 trillion by the end of 2028. Growth has recently stalled at around $304 billion, influenced by weaker digital asset markets and regulatory delays following the US GENIUS Act.

Standard Chartered Stablecoin Market Cap Projection
Standard Chartered Stablecoin Market Cap Projection. Source: Standard Chartered.

However, Standard Chartered considers these factors cyclical rather than structural. Stablecoin demand, combined with ongoing Fed Reserve Management Purchases and replacement of maturing mortgage-backed securities, could therefore drive a historic reshaping of short-term US debt markets.

The report concludes that while suspending 30-year bond auctions would not be unprecedented—the Treasury paused them from 2002 to 2006—the current deficit environment differs markedly.

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Backpack Offers 20% Equity to Token Stakers Ahead of IPO

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Backpack Offers 20% Equity to Token Stakers Ahead of IPO

Crypto trading platform Backpack Exchange on Monday announced that stakers of its forthcoming Backpack token will be able to earn equity in the exchange, as the company moves toward a potential initial public offering.

“Users that stake the Backpack token for at least a year will have the opportunity to exchange those tokens for equity at a fixed ratio—20% of the company today,” said Backpack CEO and founder Armani Ferrante in a post to X on Monday.

Speaking about the equity offering, Ferrante said many past token launches were built on “false promises” of utility — a pitfall he wanted to avoid. Instead, he said he wanted to offer users an alternative token structure showing long-term commitment.

“I came into crypto because I believe it’s going to change the world … But somewhere along the way, amidst the booms, the busts, the moonshots, the decentralization theater, and the straight up scams, we lost our way. I don’t know about you, but I’m just tired of false promises.”

Backpack’s offer would anchor the token’s value to company equity.

Backpack prioritizes users with tokenomics setup

Backpack first announced it would launch the Backpack token in a post on X earlier this month. 

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The tokens are intended to be unlocked in stages as the company moves toward a potential US IPO.

Backpack said 25% of the 1 million-token supply will be unlocked at the Token Generation Event, while the next 37.5% of the tokens will be released before the IPO, provided that Backpack reaches certain milestones, such as regulatory approvals and the launch of new products.