JPMorgan Chase & Co., an American investment banking company, has expressed skepticism over the striking $2 trillion growth projection for the stablecoin market. The corporation has called it “a little bit optimistic.”
The projection, repeatedly highlighted during recent efforts to pass U.S. cryptocurrency regulation, was endorsed by Treasury Secretary Scott Bessent. He suggested the market could surpass this estimate by 2028 with legislative support.
Such growth would represent an eightfold increase from the current $260 billion market value of all stablecoins. However, JPMorgan’s experts, led by Teresa Ho, stated that such growth would not happen soon because the technology and systems needed for stablecoins to be widely used are not ready yet.
As per reports, the firm believes the market might only double or triple in size, which is much less than the $2 trillion prediction. While stablecoins do make cross-border payments and money transfers easier, they currently only make up less than 1% of global money transactions. Hence, they will take time to replace traditional banking systems.
Two major stablecoins, Tether’s USDT and Circle’s USDC, hold over 60% of the market. They are more popular with businesses than everyday consumers, who mainly use them to hold or move money. However, liquidity investors are uncertain about using stablecoins as a cash substitute because they prefer safer, traditional options for managing money.
Further, a new U.S. law called the GENIUS Act has made stablecoins more reliable by specifying clear rules. It requires companies issuing dollar-backed stablecoins to keep an equal amount of safe assets, like U.S. Treasuries, to back them up. This reduces risks and could encourage more use in the future. Bessent highlighted that dollar-pegged stablecoins could increase global demand for the U.S. dollar and debt
Also Read: WisdomTree Launches USDW Stablecoin Backed by U.S. Dollar
