JPMorgan Forecasts $500 Billion Stablecoin Market by 2028 Due to Regulatory Hurdles

JPMorgan has projected that the stablecoin market will reach $500 billion by 2028, a figure significantly lower than the multi-trillion dollar estimates predicted by other financial institutions. The bank attributes this conservative forecast to minimal mainstream adoption and regulatory hurdles that are expected to limit the growth potential of dollar-pegged cryptocurrencies.

The current stablecoin market is valued at $250 billion, with the majority of its value being utilized for collateral, decentralized financing, and cryptocurrency trading. Payments adoption remains low, accounting for only 6% of total demand, or approximately $15 billion. JPMorgan argues that the idea of stablecoins replacing fiat currency for everyday transactions is still far from reality.

Several factors contribute to this pessimistic outlook. The limited applications of stablecoins outside of crypto markets and the scattered regulatory environments create uncertainty for potential adopters. Additionally, many countries are focused on developing their own central bank digital currencies (CBDCs) or strengthening existing payment systems, which further constrains international uptake.

For instance, China’s central bank has pledged to expand the international use of the digital yuan, and companies like Ant Group plan to apply for stablecoin licenses in China Hong Kong through their overseas operations. However, JPMorgan notes that neither the expansion of China’s e-CNY nor the success of Alipay and WeChat Pay serve as viable templates for future stablecoin growth.

On June 18, 2025, the Senate passed the GENIUS Act, which aims to create the first comprehensive federal framework for payment stablecoin issuance, regulation, and oversight in the United States. The legislation enjoys strong bipartisan support and has backing from the White House, making its passage through the House highly likely. The Act would provide clear regulatory guidelines addressing issuer eligibility, reserve requirements, oversight protocols, transparency standards, and consumer protection measures.

Only federally regulated banks, specifically eligible nonbank companies, and state-licensed issuers under stringent guidelines would be allowed to create regulated stablecoins under the new structure. The Act requires adherence to consumer protection and anti-money laundering regulations, fully collateralized reserves, and frequent public disclosures. Bo Hines, Top Digital Assets Adviser to the U.S. President, believes stablecoin regulation could push the digital asset industry to $15-20 trillion in value. He suggests this regulatory foundation would enable tokenized public securities, 24-7 markets, and global U.S. dollar access, positioning America as the global leader in crypto and fintech innovation.

Circle, a major stablecoin issuer, recently went public on the NYSE and has applied for a national trust bank charter to align with the new regulatory requirements. JPMorgan’s pessimistic view is based on the current limited application of stablecoins beyond cryptocurrency markets. The bank’s report states that payments use is merely 6% of overall stablecoin demand, approximately $15 billion of the estimated $250 billion market. Most stablecoin use is still relegated to crypto trading, decentralized finance, and collateral provision. This narrow use pattern is far from the broad financial integration by 2028 for which trillion-dollar projections are made.

Several barriers stand in the way of the adoption of stablecoins on mainstream payment systems. Decentralized regulatory mechanisms create uncertainty for corporations willing to integrate stablecoins. However, a few applications of stablecoins beyond crypto markets reduce appeal among mainstream consumers. The technological sophistication of stablecoin technology also creates challenges for general consumers who are accustomed to traditional payment systems. JPMorgan contends that the traditional payment systems and new CBDCs are not providing good models for stablecoin expansion.