Citigroup has released a new report which suggests that the global stablecoin market could potentially reach $4 trillion by 2030 in a bull-case scenario, and $1.9 trillion in base case.
The new report by Citi, released on September 25, shows a notable rise in its prediction for stablecoin growth. This follows its earlier report where it claimed the rise at $1.6 trillion in base case and $3.7 trillion in bull-case.
Reportedly, stablecoins could support an annual transaction volume of up to $100 trillion. However, Citi says that while this is rather substantial, it still remains small compared to the trillions of dollars in daily transactions handled by top global banks. The bank also cautioned investors that cross-border payments are slower, as many countries already have efficient and low-cost domestic payment systems.
Moreover, Citi cites that competition from other digital assets is suspected. Many corporations are more inclined to use bank-issued tokens because of their regulatory status. As a result, the report predicts that the trading volume of these bank tokens may eventually exceed that of stablecoins, potentially reaching over $100 trillion in transaction value by 2030.
Stablecoin market dynamics
According to data from DeFillama, the global stablecoin market supply is currently sitting at $295.76 billion. It has surged by over 6% in the past month. This rise is claimed to be “due to the strong growth of the market in the past six months and the wide range of project announcements, in the U.S. and internationally,” according to the report.
“The movement towards using blockchain technology for instantaneous settlement and real-time confirmation is a natural progression towards a 24×7, always-on world and something we have already been investing in. We are focused on integrating and commercializing it with our other client offerings and are excited about the future benefits we will be able to unlock,” said Shahmir Khaliq, Global Head of Services, Citi.
Co-authors of the report, Ronit Ghose and Ryan Rugg, described stablecoins as the “catalyst for blockchain’s ChatGPT moment” when it comes to its adoption in the market. They compared it to the early days of the internet, explaining that the current developments in the crypto world feel similar to a time when the internet’s full potential was still widely underestimated. The report says that rather than destroying the existing financial system, crypto is helping to “reimagine it.”
Citi’s overall view is that the future of digital finance is not a “format war.” Instead, stablecoins, bank tokens, and central bank digital currencies (CBDCs) will likely coexist, serving a different purpose and contributing to a smarter and faster financial infrastructure.
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