JPMorgan Warns Stablecoin Growth Is Slowing, Predicts $500B Cap by 2028

Despite all the talk about stablecoins reshaping finance, JPMorgan is pumping the brakes. In a new report, the bank says the stablecoin market is likely to grow to $500 billion by 2028 – much lower than the $1 trillion to $2 trillion predictions being pushed by some others in the industry.

Here’s what we’re seeing: the hype around mass adoption doesn’t match what’s actually happening.

Read on for the details. 

Most Stablecoin Demand Still Comes From Crypto Insiders

JPMorgan’s research, led by strategist Nikolaos Panigirtzoglou, takes a realistic view of how stablecoins are used today. According to the report, a massive 88% of demand comes from within the crypto ecosystem – things like trading, DeFi activity, and idle treasury funds held by crypto firms.

In contrast, payments only make up 6% of stablecoin use.

That’s a key reason the bank isn’t buying into the trillion-dollar forecasts. 

As the report puts it, “We find forecasts for an exponential expansion of the stablecoin universe from $250 billion currently to $1 trillion-$2 trillion over the coming years as far too optimistic.”

Not Ready to Replace Banks or Wallet Apps

Some analysts believe stablecoins will pull funds away from bank deposits or money market accounts. But JPMorgan disagrees. They say there’s not enough yield, and moving money between crypto and fiat still involves too much friction.

The bank also shot down comparisons to China’s e-CNY and popular mobile wallets like Alipay and WeChat Pay, saying those are centralized systems and shouldn’t be used as a benchmark for how stablecoins might grow.

Others See a Much Bigger Future

Not everyone agrees with JPMorgan’s cautious take. Standard Chartered, in an earlier report, said U.S. legislation, especially the upcoming Genius Act, could be a turning point.

They believe regulation could trigger a 10x jump in stablecoin supply, pushing the market to $2 trillion by 2028.

“U.S. legislation would further legitimize the stablecoin industry,” their analysts wrote, adding that legal clarity could drive rapid growth.

Real Growth, But With Limits

So what’s the takeaway?

Stablecoins are growing, but not as fast or as broadly as some expect. Right now, most of the activity is still inside crypto circles. Until payments and mainstream adoption catch up, growth will likely stay tied to the crypto space.

Whether new laws change that story is something to watch. But for now, JPMorgan is betting on slow and steady. And like you know, that often wins the race. 

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