J.P. Morgan has sharply lowered its projections for the global stablecoin market, forecasting that the total value of stablecoins in circulation will only reach $500 billion by 2028.
The estimate, released Thursday, counters far more bullish forecasts by other market watchers, including Standard Chartered and Bernstein, who see the stablecoin market growing as high as $2 trillion and even $4 trillion over the next decade.
In a note to investors, J.P. Morgan analysts said expectations that stablecoins would revolutionize mainstream payments are “far too optimistic,” pointing to persistent structural challenges, limited real-world use cases, and a lack of regulatory clarity as key obstacles.
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“The idea that stablecoins will replace traditional money for everyday use is still far from reality,” the brokerage firm stated.
Limited Real-World Use
According to J.P. Morgan, stablecoin usage remains heavily concentrated within the crypto ecosystem. The bank estimates that only 6% of current demand—about $15 billion—is related to payments, while the overwhelming majority of stablecoins are still being used in crypto trading, decentralized finance (DeFi), and as collateral on exchanges.
That puts a ceiling on their current utility in broader financial markets. “Payments adoption is minimal,” the analysts noted, adding that the notion of stablecoins overtaking traditional money remains “speculative at best.”
The report pegs the current stablecoin market size at around $250 billion—halfway to its 2028 projection. That figure aligns with data from blockchain analytics platforms, which track the combined market capitalization of top stablecoins such as Tether (USDT), USD Coin (USDC), and DAI.
A Stark Contrast with Bullish Forecasts
J.P. Morgan’s conservative view contrasts sharply with earlier predictions. Standard Chartered in May said the market could grow to $2 trillion by 2028 if stablecoins are increasingly used for remittances, digital payments, and smart contracts. Bernstein, in a note dated June 30, projected the market could hit $4 trillion within the next 10 years—assuming regulatory clarity and adoption by banks and fintechs accelerate.
Those optimistic forecasts have been fueled by developments such as the U.S. Senate’s passage of the GENIUS Act, a bipartisan bill designed to provide a regulatory framework for stablecoins. Analysts have touted the bill as a potential catalyst for greater investment and adoption of stablecoins in payment systems, settlement rails, and cross-border transfers.
But J.P. Morgan is urging caution. It says the GENIUS Act, while a step forward, has yet to translate into real-world use or regulatory alignment across key jurisdictions.
Regulatory Uncertainty, Global Competition
Beyond the U.S., global competition and regulatory fragmentation continue to slow adoption. In June, China’s central bank reaffirmed its commitment to expanding the international use of the digital yuan (e-CNY), the country’s central bank digital currency (CBDC). Beijing sees e-CNY as a strategic alternative to dollar-based stablecoins, especially for cross-border trade and Belt and Road economies.
Meanwhile, Chinese fintech giant Ant Group—an affiliate of Alibaba—said last month it would seek a license to issue stablecoins through its Hong Kong-based arm, Ant International. The move underscores growing interest in stablecoin issuance from established players in the digital payments space.
Still, J.P. Morgan downplayed the potential impact of both e-CNY and platforms like Alipay and WeChat Pay as models for global stablecoin growth.
“Neither the rapid expansion of e-CNY nor the success of Alipay and WeChat Pay represent templates for stablecoin expansion in the future,” the firm said.
Market Focus Remains Crypto-Native
For now, the stablecoin market remains mostly crypto-native. Tether (USDT), the largest stablecoin, dominates trading volumes and reserves, despite persistent concerns over transparency and reserve audits. USD Coin (USDC), backed by U.S.-based Circle, has tried to position itself as the more regulated and transparent option, but even it has seen usage fluctuate amid market volatility and U.S. banking sector risks.
J.P. Morgan noted that while stablecoins have appeal as digital cash equivalents, their ability to displace traditional payments is constrained by:
- Low or no yield for holders,
- Regulatory risk,
- Limited merchant acceptance,
- Poor on/off ramp infrastructure for converting to and from Fiat,
- And the dominance of well-established real-time payment systems in countries like India, Brazil, and China.
The firm’s $500 billion estimate reflects a more cautious but realistic trajectory for stablecoins. Growth will likely continue but at a moderate pace, concentrated in crypto-native applications and niche financial services. Broader adoption as a payments tool will require both technological improvements and a more uniform global regulatory environment—both of which are still developing.