- J.P. Morgan cut its stablecoin market forecast to $500B by 2028, citing limited payment adoption.
- Only 6% of current stablecoin use is for payments, with most demand from crypto activities.
- Regulatory gaps and minimal real-world use continue to hinder stablecoin expansion worldwide.
J.P. Morgan has lowered its stablecoin market projection, cutting its 2028 forecast to $500 billion. The bank previously expected much higher growth, in line with other financial institutions. Standard Chartered projected that the stablecoin supply could reach $2 trillion by 2028. Bernstein recently forecast $4 trillion in growth over the next decade.
But J.P. Morgan now considers those numbers unrealistic. The firm stated that stablecoin usage remains primarily within cryptocurrency trading and decentralized finance (DeFi). Its analysts estimate that 88% of current demand comes from crypto-native activity. These include trading, collateral for DeFi, and idle treasury funds.
According to the bank, only 6% of demand comes from payment-related use. This equals roughly $15 billion out of the current $250 billion market. The bank said the idea of stablecoins replacing traditional money is still far off.
Use Cases Lag, Regulation Remains Patchy
The revised forecast reflects bigger issues in the stablecoin ecosystem. Adoption outside of crypto remains minimal. Many regulators still lack clear rules for these digital assets. Some countries focus on developing central bank digital currencies (CBDCs) instead, with China expanding the international use of its e-CNY.
In June, Ant Group announced plans to issue stablecoins through its Hong Kong-based subsidiary. This move reflects interest from large tech firms. However, the usage of international stablecoins remains low.
Another obstacle that J.P. Morgan mentioned is the difficulty of substituting the traditional bank deposits. Stablecoins do not have yield. The switch between fiat and crypto introduces friction. These challenges discourage the adoption of everyday payments.
Policy and Innovation Face Crossroads
The U.S. recently passed the GENIUS Act in the Senate. This bill aims to regulate stablecoins and bring clarity to issuers. Analysts see this as a step forward, but progress is slow. The bill could pave the way for growth if the House passes it soon. Standard Chartered stated that this legislation could trigger a 10-fold increase in stablecoin supply.
J.P. Morgan remains cautious, projecting only modest growth driven by crypto-native use cases. It also warned against expecting a major shift away from traditional finance. The bank emphasized that most stablecoins are still used for speculation. Payments and remittances remain minor drivers. For real growth, stablecoins must move beyond trading desks and into real economies.
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Some countries, like Singapore and the U.K., are working on frameworks for stablecoins. Others continue to focus on CBDCs or improving their banking rails. J.P. Morgan’s outlook suggests stablecoin growth will be steady but limited. The firm expects a $500 billion market by 2028. This figure is far below previous bullish predictions.
While some regulators and companies push for innovation, usage gaps persist. Until stablecoins gain broader utility, their growth will likely stay tied to crypto ecosystems.
For now, stablecoins remain essential to trading, DeFi, and crypto liquidity. It is unclear what their future holds beyond these zones. With the shift in regulation, the balance between central bank digital currencies and stablecoins will continue to define global financial innovation.
