JPMorgan Forecasts $500 Billion Stablecoin Market by 2028 Driven by Crypto Activities

JPMorgan strategists have projected that the stablecoin market is set to reach $500 billion by 2028. This forecast is notably more conservative than other optimistic predictions that anticipate the market cap to surge to between $1 trillion and $2 trillion within the same period. The bank's analysis, led by strategist Nikolaos Panigirtzoglou, suggests that the primary driver of stablecoin usage remains crypto-native activities rather than broader payment adoption.

The report highlights that stablecoins, which are cryptocurrencies pegged to the value of another asset such as the U.S. dollar or gold, play a crucial role in cryptocurrency markets. They serve as a payment infrastructure and are used for international money transfers. However, according to JPMorgan's analysts, approximately 88% of current stablecoin demand is driven by crypto-native activities. These activities include trading, decentralized finance (DeFi) collateral, and idle funds held by crypto firms, with payments accounting for only 6% of the demand.

Even with optimistic assumptions, the growth of stablecoin use in payments is expected to have only a marginal impact on the overall market size. JPMorgan also dismisses the possibility of a significant shift from traditional bank deposits or money market funds into stablecoins, citing the lack of yield and the added friction in moving between fiat and crypto. The firm's analysts also push back on comparisons with centralized systems like China’s e-CNY or the rise of Alipay and WeChat Pay, noting that these systems do not operate in the same decentralized manner as stablecoins.

Ultimately, JPMorgan envisions a moderate, crypto-driven growth path for stablecoins rather than a scenario of mass adoption. This perspective contrasts with more bullish views held by some other banks. For instance, investment bank Standard Chartered has predicted that the passage of the Guiding and Establishing National Innovation for U.S. Stablecoins (Genius) Act could trigger an almost 10-fold increase in stablecoin supply, potentially reaching $2 trillion by the end of 2028. Standard Chartered's analysts believe that such legislation would further legitimize the stablecoin industry, driving significant growth.