JPMorgan predicts that the Stablecoin market will reach $500 billion by 2028, but this forecast is largely left to optimistic expectations that the market value could range from $1 trillion to $2 trillion in the same period.
JPMorgan: Stablecoin market could reach $500 billion by 2028, but expectations are overly optimistic
A report released on Thursday by a team led by JPMorgan Strategist Nikolaos Panigirtzoglou, portrayed a more cautious growth scenario for the future of the sector.
According to the report, the main factor in Stablecoin adoption remains an activity from crypto origin, with large-scale payment integrations still being limited.
“The prediction that Stablecoin’s universe will grow to $1-2 trillion in a few years seems overly optimistic to us,” he said.
According to JPMorgan, approximately 88% of Stablecoin demand comes from in-crypto transactions such as spots and futures, Defi collateral and reserve assets of crypto companies. In comparison, payments account for just 6%.
Banks argue that even in the most optimistic scenarios, the market size for stubcoins for payment purposes shows a limited increase.
He also said that a massive capital shift from traditional bank deposits or money market funds to stubcoin cites low yields and difficulties in switching between fiat and crypto.
Some agencies are far more optimistic than JPMorgan. Standard Chartered, for example, predicts that if the Genius (Guidelines and Establishment of National Innovation in Stablecoins) Act passed, stubcoin supply could increase by 10 times, reaching $2 trillion by 2028.
Pointing out that the legislation provides legitimacy to the sector, standard chartered countries say this could lead to a significant increase in the supply of US-based stable rocks.
*This is not investment advice.