Goldman Sachs: Stablecoin Market Poised for 40% Growth, $20 Trillion Potential

Goldman Sachs, a leading investment bank, has released a research report indicating that the stablecoin market is on the brink of a new expansion phase, with the potential to reach a scale of tens of trillions of dollars. The report highlights that the payment sector will be the core driver for the expansion of the total addressable market (TAM) for stablecoins in the long term. Although current applications of stablecoins are primarily focused on cryptocurrency trading and offshore dollar demand, the potential for penetration in payment scenarios remains largely untapped.

According to Goldman Sachs' estimates, the global stablecoin market currently stands at 271 billion dollars. Circle's USDC is expected to benefit significantly from legislative progress and ecosystem expansion. The report emphasizes that as the legislative framework for stablecoins in the U.S. becomes clearer, the cryptocurrency ecosystem will mature further. USDC, through its partnerships with platforms like Binance, is projected to see its market share increase both domestically and internationally, with an expected growth of 77 billion dollars by the end of 2027, representing a compound annual growth rate of 40%.

Looking further ahead, the potential market size for stablecoins could reach tens of trillions of dollars. For instance, Visa's statistics show that the global payment market is approximately 24 trillion dollars annually, with consumer payments accounting for 4 trillion dollars, B2B payments around 600 billion dollars, and the remainder consisting of P2P and daily expenses.

Despite the current dominance of stablecoins in cryptocurrency trading and offshore dollar demand, their penetration into payment scenarios is expected to drive core growth. Given that U.S. stablecoins must be backed 1:1 with dollars or treasury bonds, the issuance of each stablecoin will directly increase the demand for corresponding reserve assets. This mechanism could have structural implications for the bond market, particularly for short-term, low-yield treasury bonds.

The International Monetary Fund's research model suggests that a 2 standard deviation inflow of funds into stablecoins could cause a 2-2.5 basis point drop in the yield of 3-month U.S. treasury bonds within 10 days. However, the impact on yield when funds flow out could be two to three times greater, showing a clear asymmetry.

This growth expectation is partly based on favorable policies. The U.S. White House's recently passed GENIUS Act aims to coordinate state and federal regulatory rules, providing crucial institutional support for the stablecoin market.

In terms of market competition, Tether's USDT remains the leader in global stablecoin supply. However, due to regulatory constraints, USDT cannot directly serve U.S. users. Circle, ranking second, aims to leverage new legislative benefits and potentially friendly cryptocurrency policies under the current administration to expand the adoption of USDC. Traditional financial institutions, such as U.S. banks, are also planning to issue their own dollar-pegged stablecoins, which could intensify competition for USDC. Tether's CEO has indicated that the company is developing strategies to enter the U.S. market, aiming to overcome current regulatory barriers.

The U.S. Treasury Secretary has also expressed optimism about the prospects of the stablecoin market. The Secretary believes that legislation backing stablecoins with U.S. treasury bonds or short-term treasury bills will create a massive market, reinforcing the dollar's global reserve status and expanding its usage, thereby driving related demand.

The Secretary considers a 20 trillion dollar market size to be a "reasonable target," with the actual size potentially exceeding this figure. This view aligns with Goldman Sachs' long-term projections. However, market observers note that institutions like UBS have cautioned that stablecoins may represent more of a shift in fund forms rather than a net increase in demand, and their actual impact remains to be seen through fund flow directions and scales.

UBS analysts have pointed out that the Treasury Secretary's hope that stablecoins will increase demand for short-term treasury bonds to ease fiscal pressure has a logical flaw: when investors sell treasury bonds to acquire stablecoins and then reinvest in treasury bonds through stablecoins, it does not create new demand but rather a shift in fund forms. This perspective contrasts with Goldman Sachs' optimistic outlook, highlighting the market's differing views on the actual impact of stablecoins.

Overall, the refinement of the regulatory framework for stablecoins and the expansion of payment scenarios are reshaping the connection between cryptocurrencies and traditional finance. While the specific impact on the treasury bond market remains to be observed through fund flow directions and scales, policy support and technological potential have clearly positioned stablecoins at the core of digital financial innovation.