JPMorgan Forecasts Stablecoins Will Not Reach $1 Trillion by 2028
- JPMorgan says stablecoin growth is driven by crypto trading, not payments adoption.
- Stablecoin market may reach $500–$600B by 2028, far below trillion-dollar forecasts.
- Banks and CBDCs could limit stablecoin adoption in institutional and cross-border use.
JPMorgan has challenged predictions that stablecoins could reach a trillion-dollar market by 2028. The bank says growth is tied primarily to crypto trading, not payments adoption. Faster payment circulation reduces the need for larger stablecoin holdings, reinforcing a conservative outlook for the sector.
On Wednesday, analysts led by managing director Nikolaos Panigirtzoglou said the stablecoin market has expanded to more than $300 billion this year. Tether’s USDT grew by about $48 billion, while Circle’s USDC increased by $34 billion. Together, these two coins accounted for most of the growth.
The analysts noted that stablecoin demand remains concentrated within the crypto ecosystem. Traders use stablecoins as cash or collateral for derivatives, DeFi lending, and borrowing. Venture funds and other crypto-native businesses also have idle balances in these tokens.
This year alone, derivatives exchanges added roughly $20 billion in stablecoins. Higher volumes of perpetual futures trading continue to drive supply expansion. Analysts emphasized that broader payment adoption does not automatically increase the stablecoin market cap.
Stablecoin Growth Driven by Trading Cycles
JPMorgan analysts explained that token velocity influences supply needs more than adoption. As payment usage rises, stablecoins circulate faster, lowering the required holdings. For example, USDT’s annual velocity on Ethereum is roughly 50. If stablecoins handled 5% of global cross-border payments, only $200 billion would be required.
The bank forecasts the market could reach $500 billion to $600 billion by 2028. That estimate contrasts sharply with Citi’s projection of $1.9 trillion and Standard Chartered’s $2 trillion prediction. Analysts argue that trading activity remains the main driver of growth, not payments adoption.
The report also highlighted the role of tokenized deposits. JPMorgan launched JPM Coin (JPMD) on the Base Layer 2 network for institutional clients. The token represents U.S. dollar deposits and enables faster on-chain payments while remaining fully regulated.
Tokenized deposits can be bearer or non-bearer. Regulators generally prefer non-transferable designs to preserve the “singleness of money” and reduce liquidity risk. Analysts said these initiatives provide safer payment alternatives while reducing concentration risk inherent to stablecoins.
Related: JPMorgan Launches Onchain Money Market Fund With Real Yield
Banks and CBDCs Could Limit Stablecoin Expansion
JPMorgan analysts noted that SWIFT’s blockchain payment experiments could reinforce banks’ role in cross-border settlement. Such solutions may limit stablecoin adoption in institutional markets.
Central bank digital currencies, including the digital euro and digital yuan, also offer regulated alternatives. Analysts said CBDCs could reduce reliance on privately issued stablecoins in cross-border and institutional use cases.
Overall, JPMorgan concluded that stablecoin growth will likely track the broader crypto market rather than exceed it dramatically. Greater payment adoption does not necessarily require more tokens. Banks and CBDCs could further restrain expansion, keeping stablecoins as utility-focused trading tools.
Analysts stressed that stablecoins remain critical for trading, derivatives, and DeFi activity. However, their function as broad payment instruments faces structural limits. The market is likely to grow steadily, reaching half a trillion to $600 billion by 2028, below the most optimistic projections.
