U.S. Treasury Department's Surprising Forecast: Stablecoins to Reach $2 Trillion by 2028, UK Promises to Keep Pace

UK’s Central Bank Deputy Governor Sarah Breeden stated on Wednesday at the SALT conference in London that the UK will implement a stablecoin regulatory framework “as quickly as the US,” dismissing concerns that the UK is falling behind. The Canadian government also announced plans to regulate stablecoins, requiring issuers backed by fiat currency to maintain sufficient reserves. The US Treasury estimates that the stablecoin market, valued at $310 billion, will grow into a $2 trillion industry by 2028.

Strategic Significance of Synchronizing US and UK Regulations

(Source: Bloomberg)

Deputy Governor Sarah Breeden emphasized the importance of the UK aligning its stablecoin regulation with that of the US, stating that “it’s very important” for allies to coordinate rules governing this $310 billion industry. This regulatory coordination has far-reaching strategic implications beyond surface-level concerns; it pertains to the future competitive landscape of the global financial system.

According to reports, Breeden announced at the SALT conference in London that the UK will “move swiftly” to establish a stablecoin regulatory framework—countering worries that the UK is lagging, especially after the US passed the milestone GENIUS Act in July. The GENIUS Act sets clear reserve requirements, risk management standards, and regulatory frameworks for US stablecoin issuers, marking a significant breakthrough in US crypto legislation.

Breeden confirmed that UK regulators are in communication with US authorities, as the Bank of England prepares to release its consultation on stablecoins on November 10. “I’ve been in touch with the Fed… regulators over there and our Treasury are working together,” she said. This cross-border coordination indicates that major economies recognize that stablecoin regulation cannot be done in isolation; otherwise, it risks regulatory arbitrage and systemic risks.

This latest statement builds on a September meeting between UK Chancellor Rishi Sunak and US Treasury Secretary Janet Yellen, where both agreed to strengthen coordination on crypto and stablecoin activities. This high-level engagement established a strategic partnership between the UK and US on stablecoin regulation, involving sharing regulatory insights, coordinating enforcement, and harmonizing standards to reduce cross-border compliance costs.

Prior to this, UK crypto advocacy groups urged the government to adopt a more open stance, claiming current policies hinder innovation and put the UK behind other nations. This pressure has prompted regulators to reconsider their cautious approach, shifting toward a more balanced strategy that fosters innovation while managing risks.

Controversy Over £10,000 Holding Limit and Policy Shift

The Bank of England faced strong criticism from industry groups after proposing at the end of 2023 to cap individual stablecoin holdings between £10,000 and £20,000 ($13,050–$26,100), arguing that such restrictions would be difficult and costly to enforce. The proposal sparked significant industry backlash, as it would limit user freedom and pose substantial technical challenges.

One core feature of stablecoins is permissionless, global circulation. How can a decentralized system track and enforce individual holding limits? This would require issuers to implement KYC (Know Your Customer) systems, verify real identities behind each address, and monitor holdings in real-time. Such surveillance is costly and raises privacy concerns. Moreover, users could easily circumvent limits by using multiple wallets, making enforcement nearly impossible.

Industry criticism has prompted the Bank of England to reconsider the proposal. Breeden’s recent comments suggest regulators are shifting toward a more pragmatic approach. Instead of setting difficult-to-implement holding caps, focus may shift to transparency of reserves, redemption mechanisms, and risk management standards—similar to the US GENIUS Act, which does not impose individual limits but requires issuers to hold reserves equal to 1:1 fiat or equivalent assets.

The upcoming stablecoin consultation document on November 10 will reveal the UK regulator’s final stance. If the document abandons or significantly relaxes the holding limit, it would signal a friendly move toward the crypto industry. Conversely, maintaining strict restrictions could push stablecoin issuers and users toward more regulation-friendly jurisdictions, weakening London’s position as a global financial hub.

Canada Joins the Regulatory Coordination Trio

Canada is also considering entering the stablecoin space. On Tuesday, the government announced a plan to regulate stablecoins, requiring fiat-backed issuers to maintain adequate reserves and adopt strong risk management measures. This marks the formation of a unified front among major North American and European financial centers on stablecoin regulation.

While the plan does not specify when legislation will be introduced, it is part of broader efforts to modernize payments and enable Canadians—population 42 million—to conduct digital transactions more quickly, cheaply, and securely. Canada’s regulatory approach aligns closely with the frameworks in the US and UK, emphasizing reserve transparency, prudent issuer oversight, and consumer protection.

This cross-national coordination is no coincidence. As global digital assets, stablecoins inherently cross borders. Divergent regulations could lead to arbitrage—issuers registering in the most lenient jurisdictions and offering services worldwide—undermining effective regulation. The coordinated approach among the US, UK, and Canada provides clearer compliance pathways and sets a de facto international standard for stablecoins.

Common Points in US, UK, and Canadian Stablecoin Regulations

• Reserve Requirements: Issuers must maintain reserves of 1:1 or higher fiat/equivalent assets
• Transparency Standards: Regular audits and public disclosures of reserve holdings
• Risk Management: Redemption policies, liquidity management, and stress testing
• Issuer Prudential Regulation: Licensing or registration requirements for operation

Canada’s involvement completes a triad with North America’s two largest economies and London, Europe’s financial hub. These three economies—collectively accounting for over $25 trillion in GDP—cover about one-third of global economic output. When these major players adopt harmonized standards, other countries are likely to follow, establishing an effective international norm for stablecoin regulation.

Corporate Adoption Surge and the $2 Trillion Target by 2028

Meanwhile, corporate adoption of stablecoins is accelerating. Over recent months, companies like Western Union, SWIFT, MoneyGram, and Zelle have integrated or announced plans to integrate stablecoin solutions. Their involvement signals that stablecoins are moving from crypto-native applications into mainstream finance.

Western Union, one of the world’s largest remittance providers, integrating stablecoins could offer millions of migrant workers cheaper, faster cross-border remittances. Traditional remittance fees range from 5-10%, taking 3-5 days. Stablecoin remittances typically cost less than 1% and settle within minutes, disrupting the traditional remittance market.

SWIFT, the global interbank messaging system handling trillions of dollars daily, exploring stablecoin integration could have profound implications. If stablecoins are integrated into SWIFT, it would provide institutional-level liquidity and trust. The participation of MoneyGram and Zelle also indicates that domestic US payment systems are actively embracing stablecoin technology.

In April, the US Treasury estimated that the $310 billion stablecoin market could grow to $2 trillion by 2028—a roughly 545% increase over three years. This explosive growth is driven by clearer regulation, large-scale adoption by traditional financial firms, rising cross-border payment demand, and stablecoins’ role as foundational DeFi infrastructure.

A $2 trillion market would make stablecoins a significant component of the global financial system. For context, the world’s M0 (cash in circulation) is about $8 trillion; a $2 trillion stablecoin market would account for roughly 25% of that. This scale indicates stablecoins will no longer be fringe innovations but essential payment tools alongside sovereign currencies. The coordinated regulation efforts by the US, UK, and Canada aim to ensure healthy growth within a compliant framework as this $2 trillion market materializes.

From $310 billion today to $2 trillion in 2028, annual growth would need to average around 60%. While aggressive, this is plausible: in 2023–2024, the market grew from about $120 billion to $310 billion—over 150% annually. With improved regulation and enterprise adoption, maintaining a 60% annual growth rate is achievable.