Stablecoins are on the verge of moving into the mainstream of financial technologies, according to a new report from Citi Institute. The market cap is expected to reach $1.6 trillion by 2030, with a potential increase to $3.7 trillion if adoption accelerates.
Growth Prospects of Stablecoins
Stablecoins, typically pegged to fiat currencies like the US dollar, have already witnessed significant growth. Citi notes that this trend is far from over. If adoption continues, this could lead to a substantial market cap increase.
The Role of Stablecoins in US Debt
Issuers of stablecoins may become some of the largest buyers of US government bonds. For instance, Tether (USDT) was among the top seven holders of US government debt in 2024. By 2030, stablecoin issuers may demand up to $1 trillion in Treasuries to back their tokens with safe and liquid assets.
Regulatory and Technical Hurdles
Citi predicts that 2025 could be a pivotal moment for blockchain in finance and governance, but this shift depends on regulatory clarity. The US has already made strides in legislation surrounding the backing and issuance of stablecoins, which could open doors for broader usage.
Stablecoins continue to evolve and show potential for significant heights in the coming years. However, their success relies on addressing existing regulatory and technical challenges.
