Goldman Sachs says we’re on the verge of a stablecoin gold rush worth trillions

Jim Edwards is the executive editor for global news at Fortune. He was previously the editor-in-chief of Business Insider's news division and the founding editor of Business Insider UK. His investigative journalism has changed the law in two U.S. federal districts and two states. The U.S. Supreme Court cited his work on the death penalty in the concurrence to Baze v. Rees, the ruling on whether lethal injection is cruel or unusual. He also won the Neal award for an investigation of bribes and kickbacks on Madison Avenue.

U.S. Treasury Secretary Scott Bessent believes stablecoins will buoy the market for U.S. Treasuries, and the government will sell more short-term debt to meet that demand, according to the Financial Times. “Bessent has signalled to Wall Street that he expects stablecoins, digital tokens that are backed

The FT’s

“This groundbreaking technology will buttress the dollar’s status as the global reserve currency, expand access to the dollar economy for billions across the globe, and lead to a surge in demand for U.S. Treasuries, which back stablecoins. The GENIUS Act provides the fast-growing stablecoin market with the regulatory clarity it needs to grow into a multitrillion-dollar industry,” he said at the time.

The GENIUS Act, announced last month, “aligns State and Federal stablecoin frameworks, ensuring fair and consistent regulation throughout the country” the White House said at the time.

So how big a deal will this be?

Goldman Sachs thinks we’re at the beginning of a stablecoin gold rush, according to a research paper published today

“Stablecoins are a $271bn global market, and we believe USDC [the stablecoin issued

The potential total market for stablecoins is in the trillions, Goldman says. “Visa sizes the addressable market for payments at ~$240 trillion in annual payment volume, with consumer payments representing ~$40 trillion of annual spending. B2B payments comprise roughly ~$60bn while P2P payments and disbursements comprise the remainder.

“As such, payments are the most obvious

Because stablecoins in the U.S. must be backed 1:1 with dollars or U.S. bonds, each stablecoin issued increases the demand for the bonds that back them. Some people think this will alter the bond market, especially for short-dated bonds with low interest yields.

A research paper

UBS’s Paul Donovan is more skeptical: “U.S. Treasury Secretary Bessent is reportedly getting excited that stablecoins might increase demand for short-dated U.S. Treasuries, helping finance the unsustainable U.S. fiscal position. However, stablecoins are more about redistributing money supply. Someone selling Treasury bills to buy stablecoins, which invest the money in Treasury bills does not change demand for US debt instruments,” he told clients this morning.

Here’s a snapshot of the markets prior to the opening bell in New York: