JPMorgan forecasts a slowdown in the stablecoin market growth, expecting its capitalization to reach $500 billion by 2028. These projections emphasize the issues with real-world usage of stablecoins.
Stablecoin Market Growth Stalls
While financial institutions are paying more attention to stablecoins, widespread use among the public has not yet emerged. They continue to be primarily utilized in the digital asset space rather than everyday transactions. Analysts state, 'rails are built, but the roads are still empty.'
Impact of the GENIUS Act on the Market
Despite a 23% growth in 2024, only 6% of demand comes from real-world payments. Regulatory developments like the GENIUS Act may help, but significant challenges remain, including competition from state-backed digital currencies and limited consumer incentives. Mainstream adoption is critical for future expansion.
Current Trends and Forecasts
The stablecoin market capital, primarily US dollar-denominated, experienced a 23% expansion in 2024, reaching $254 billion. However, this does not signify widespread consumer adoption in everyday business transactions as growth is driven mainly by cryptocurrency trading platforms. JPMorgan has lowered its outlook for the stablecoin market, projecting it to reach only $500 billion by 2028.
JPMorgan's forecasts highlight the necessity for stablecoins to have broader real-world applications to unlock their potential beyond the existing crypto infrastructure. Without adequate adoption by consumers and businesses, the stablecoin market may face significant hurdles in its development.
