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

JPMorgan has released a report predicting that the stablecoin market could reach a size of $500 billion by 2028. This forecast, however, is significantly lower than the optimistic expectations that the market value could be between $1 and $2 trillion in the same period. The report, published by the team led by JPMorgan strategist Nikolaos Panigirtzoglou, presents a more cautious growth scenario for the future of the sector.

The report highlights that the main driver of stablecoin adoption is still crypto-native activities. Large-scale payment integration remains limited, with only 6% of stablecoin demand coming from payments. The majority of stablecoin demand, around 88%, comes from intra-crypto transactions such as spot and futures trading, DeFi collateral, and crypto companies’ reserve assets.

JPMorgan argues that even in the most optimistic scenario, the market size of stablecoins for payment purposes will show a limited increase. The bank also suggests that a large-scale capital shift from traditional bank deposits or money market funds to stablecoins is unlikely. This is due to low yields and difficulties in switching between fiat and crypto.

Some institutions, however, are much more optimistic than JPMorgan. For example, Standard Chartered predicts that the supply of stablecoins could increase 10-fold by 2028, reaching $2 trillion, if the GENIUS Act is passed in the US. This law is expected to bring legitimacy to the sector, potentially leading to a large increase in the supply of US-based stablecoins.

According to the analyst's forecast, the stablecoin market's growth will be driven primarily by crypto-native activities rather than large-scale payment integration. This cautious approach by JPMorgan contrasts with the more optimistic predictions by other institutions, highlighting the differing views on the future of stablecoins. The report underscores the challenges and limitations in the stablecoin market, including low yields and difficulties in switching between fiat and crypto, which could hinder its growth.