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Stablecoin Market to Hit $500B, Not $2T: J.P. Morgan Counters Overly Bullish Projections
A new report from J.P. Morgan has significantly scaled back its previous projections for the stablecoin market, estimating that it will only reach a value of $500 billion by 2028. This forecast is a stark contrast to previously optimistic predictions suggesting a market size of $2 trillion.
According to J.P. Morgan’s analysis, stablecoins are still predominantly used within digital asset markets, decentralized finance (DeFi) applications, and as collateral, rather than in everyday financial transactions. In fact, the report claims that payment use remains minimal, accounting for only 6% of total activity at approximately $15 billion.
Despite growing interest from fintech firms and banks, J.P. Morgan believes these efforts have not yet shifted the market’s balance. The bank emphasizes that stablecoins are far from replacing traditional money, with limited progress in mainstream adoption.
The report highlights the significant regulatory challenges facing the sector, citing the lack of a unified global approach to stablecoin regulation. This fragmentation is hindering global expansion and stalling momentum. As an example, the firm points to China’s focus on its digital yuan project for cross-border transactions and Ant Group’s plans to enter the stablecoin space via Hong Kong.
While regulatory clarity has been gaining traction in recent months, J.P. Morgan believes that these advancements have yet to translate into real-world financial integration. Instead, speculative demand and crypto-native applications continue to drive market growth, rather than broad-based financial utility.
It is worth noting that other financial institutions have previously predicted even more aggressive growth for the stablecoin market. Standard Chartered had suggested a $2 trillion target by 2028, while Bernstein projected a market size of $4 trillion over the next decade. However, J.P. Morgan’s latest report serves as a reality check on these overly bullish projections.
In conclusion, it is clear that the stablecoin market will not reach the previously predicted trillions, but rather plateau at a much lower valuation.
Source: blockonomi.com
