JPMorgan Slashes Stablecoin Market Forecast to $500 Billion by 2028

JPMorgan has significantly revised its forecast for the stablecoin market capital, predicting it will reach $500 billion by 2028. This revised projection marks a substantial decrease from earlier estimates that suggested the market could hit $1 trillion. The bank's cautious outlook is driven by the limited real-world adoption of stablecoins, which are primarily used within the digital asset space rather than in everyday financial transactions. Despite a 23% growth in 2024, reaching $254 billion, the stablecoin market has yet to see widespread consumer adoption or integration into regular business transactions. The majority of stablecoin usage is still confined to cryptocurrency trading platforms, indicating that the technology, while robust, has not yet translated into mainstream financial tools.

The GENIUS Act, a recent regulatory framework aimed at stablecoins, has sparked interest in the industry's potential. However, JPMorgan remains skeptical about the market's ability to reach the trillion-dollar threshold. The bank highlights ongoing fragmentation and limited growth beyond the current crypto infrastructure as significant obstacles. According to JPMorgan, only 6% of stablecoin demand comes from real-world payments, with the rest primarily driven by crypto-native use cases. This limited adoption raises concerns about the end of the "stablecoin revolution" and the need for broader real-world applications to match the hype surrounding cryptocurrencies.

JPMorgan's report also dismisses comparisons between stablecoins and China's e-CNY rollout, noting that stablecoins lack the yield and ease of conversion between fiat and crypto that would make them viable replacements for traditional currencies. The bank emphasizes that regulation alone will not drive growth without adoption by everyday consumers and businesses. Industry players must focus on creating consumer benefits and overcoming infrastructural challenges to evolve stablecoins from niche trading tools to mainstream financial instruments. A cautious approach and innovation will define stablecoin success in the coming decade.