U.S. Eyes $3 Trillion Stablecoin Expansion Over Coming Years as Tether Compliance Risks Loom

According to Bloomberg, the U.S. government expects stablecoin issuance—primarily by Tether—to expand to approximately $3 trillion within the coming years to support the dollar's international dominance and boost demand for U.S. Treasury debt. However, the report highlights compliance risks, noting that major stablecoin issuers operate from jurisdictions with questionable regulatory frameworks and anti-money laundering practices. A bank run or smart contract failure could jeopardize the substantial U.S. debt holdings these platforms maintain, potentially disrupting global payment and settlement systems.

In response, the European Central Bank is advancing central bank digital currency and tokenized euro initiatives to support atomic settlement, aiming to avoid dependence on U.S.-backed private stablecoins for critical financial infrastructure.