JPMorgan has thrown a bucket of cold water on some of the more exuberant projections for the stablecoin market, forecasting a more modest growth trajectory. According to a recent research report from the Wall Street bank, strategists led by Nikolaos Panigirtzoglou anticipate the stablecoin market will reach approximately $500 billion by 2028. Although this is a significant increase from its current valuation, it falls far short of more optimistic predictions that anticipate a market cap surge to between $1 trillion and $2 trillion within the same period.
Crypto-Native Demand: The Real Driver
The report’s authors argue that the expansion of the stablecoin universe hinges largely on crypto-native demand rather than broader payment adoption. Currently, nearly 88% of stablecoin usage stems from activities entrenched within the crypto ecosystem—trading, decentralized finance (DeFi) collateral, and funds parked by crypto firms. Payments, in contrast, only account for a paltry 6% of demand. Even under the rosiest scenarios, the strategists assert that payment-driven growth would barely move the needle on overall market size.
Here’s the catch: Despite the buzz surrounding stablecoins as a potential disruptor in the payment landscape, JPMorgan remains skeptical of any large-scale migration from traditional bank deposits or money market funds into stablecoins. The firm cites several hurdles, including the lack of yield and the friction involved in transitioning between fiat and crypto. For a deeper exploration of stablecoins’ transformative potential, see Stablecoins Are a Monetary Revolution in the Making.
The Comparison Trap
JPMorgan also takes a critical stance against comparing the potential of stablecoins with systems like China’s e-CNY or the dominance of Alipay and WeChat Pay. The analysts point out that these platforms operate within a centralized framework, a stark contrast to the decentralized ethos of stablecoins. This distinction, according to JPMorgan, makes it unlikely that stablecoins will replicate the same meteoric growth trajectory seen in China’s digital payment landscape.
Interestingly, not everyone shares JPMorgan’s tempered outlook. In an April report, Standard Chartered painted a different picture, suggesting that the stablecoin market could balloon to $2 trillion by the end of 2028. This optimistic assessment hinges on the anticipated passage of the Guiding and Establishing National Innovation for U.S. Stablecoins (Genius) Act. According to Standard Chartered’s analysts, U.S. legislation would provide a significant boost to the industry’s legitimacy, potentially catalyzing a tenfold increase in stablecoin supply. For more on the legislative developments, see As stablecoin bill heads to House, Senate shifts to market structure.
The Path Forward: Moderate Growth
Despite the contrasting views, JPMorgan’s analysis suggests a path of moderate, crypto-driven growth for stablecoins. The bank envisions a future where stablecoins play an essential, albeit not revolutionary, role within the crypto ecosystem. This perspective raises intriguing questions about the future landscape of digital currencies. Can stablecoins transition from being a tool primarily for crypto insiders to a broader financial instrument? Or will they remain largely confined to the digital fringes?
The debate over stablecoin growth highlights the broader uncertainties permeating the cryptocurrency market. While some envision a world where stablecoins become as ubiquitous as traditional currencies, others, like JPMorgan, foresee a more restrained evolution. As the market navigates these uncharted waters, the coming years will undoubtedly reveal which vision comes to fruition. But for now, stablecoins seem destined to remain a pivotal yet niche component of the crypto universe.
As we look toward the horizon, the stablecoin market’s trajectory remains a compelling narrative, one that will undoubtedly continue to evolve. Whether it aligns more closely with JPMorgan’s measured expectations or the bullish forecasts of others, only time will tell. For now, investors and crypto enthusiasts alike will be watching closely, assessing each regulatory development and market shift for clues about what lies ahead.
Source
This article is based on: JPMorgan Sees Stablecoin Market Hitting $500B by 2028, Far Below Bullish Forecasts
Further Reading
Deepen your understanding with these related articles:
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- Stablecoin Issuance Should Begin With Banks, Says BOK Official
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
