A Goldman Sachs report this week predicts trillions of dollars could soon flood the stablecoin market. The forecast follows a stunning $7 trillion in transaction volume last quarter, indicating a seismic shift in global finance about to unfold.
The prediction comes as U.S. Treasury Secretary Scott Bessent has told Wall Street that stablecoins will play a growing role in demand for government bonds. The market is already responding, swelling to a $271 billion valuation in August.
Goldman Sachs Predicts $77B Growth in USDC Amid Stablecoin “Gold Rush”
In the new research paper released Wednesday by Goldman Sachs, the bank argues that payments represent the most obvious path for growth, though most stablecoin activity today remains concentrated in crypto trading and demand for dollar exposure outside the U.S.
Goldman’s researchers noted that the global stablecoin market, valued at roughly $271 billion, is already dominated by Tether’s USDT, which continues to hold the top spot as the largest issuer.
Source: Goldman Sachs’ Report
Circle, the second-largest issuer, is betting that recently passed U.S. legislation and a potentially crypto-friendly Trump administration will provide a regulatory environment conducive to expanding USDC adoption.
“Stablecoins are a $271bn global market, and we believe USDC [the stablecoin issued by Circle] benefits from market share gains on and off of partner Binance’s platform, as ongoing stablecoin legislation legitimizes the ecosystem, and the crypto ecosystem expands, also potentially catalyzed by legislation,” the bank wrote.
The report projects that Circle’s USDC could grow by $77 billion between 2024 and 2027, representing a compound annual growth rate of around 40%. Goldman describes this expansion as the beginning of a “stablecoin gold rush,” fueled by legislative clarity and wider integration of digital assets into the financial system.
Goldman Sachs also stressed that while stablecoins could rewire aspects of finance, they are not expected to replace established consumer card networks like Visa and Mastercard. Instead, these companies are likely to remain at the core of payment infrastructure, managing areas such as dispute resolution, rewards, and transaction distribution.
“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.”
GENIUS Act Unlocks Stablecoins’ Potential, Set to Drive Trillions in U.S. Treasury Demand
Treasury Secretary Scott Bessent has emphasized that stablecoins are more than a niche crypto product. According to the Financial Times, he has privately told Wall Street that digital tokens backed one-to-one with dollars and Treasuries could become a major source of demand for government bonds.
Publicly, he said stablecoins 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.”
Bessent’s optimism comes after the GENIUS Act was signed into law in July, giving stablecoins a clear federal framework. The White House said the act “aligns state and federal stablecoin frameworks, ensuring fair and consistent regulation throughout the country.”
Under the law, issuers are required to maintain one-to-one reserves in highly liquid, ultra-safe assets such as cash and short-dated Treasuries. Compliant stablecoins could now serve as a multitrillion-dollar engine for U.S. debt demand.
Economists remain divided on the scale of the impact. UBS’s Paul Donovan has cautioned that the trend may simply redistribute existing Treasury demand rather than generate entirely new buyers. Still, evidence suggests stablecoin flows already move markets. A Bank for International Settlements study found that inflows tend to lower three-month Treasury yields, while outflows trigger sharper upward pressure.
USDC vs. USDT: Who Wins the Compliance Era?
Goldman Sachs analysts believe the GENIUS Act could tilt the balance of power in the stablecoin market, with Circle’s USDC positioned to gain ground on Tether’s dominant USDT. The landmark law establishes a standard that aligns with Circle’s operating model but has long raised questions about Tether’s reserve transparency.
Tether, which commands a $165 billion market capitalization compared with USDC’s $66 billion, is now under pressure to adjust. The company has indicated that it is working toward GENIUS Act compliance, but Goldman notes that the regulatory clarity favors U.S.-based issuers with audited reserves, potentially giving Circle an advantage in the long run.
For Circle, the regulatory clarity comes at an important moment. The company’s IPO earlier this year gave it fresh visibility, while partnerships with firms like Robinhood show the potential for stablecoins to embed within broader payment and financial systems.
In contrast, Tether must prove that it can adapt to stricter standards without losing its global user base, particularly in emerging markets where it dominates.
As the compliance era takes hold, the contest between USDC and USDT is shaping not just the future of stablecoins but also the dynamics of U.S. Treasury demand, with implications stretching from Wall Street to Washington.
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