JPMorgan Sees Stablecoin Market Hitting $500B by 2028, Far Below Bullish Forecasts

The stablecoin market is poised to grow to $500 billion by 2028, according to JPMorgan (JPM) strategists, a projection that falls well short of some of the more exuberant forecasts calling for a $1 trillion to $2 trillion market cap within the same timeframe, the Wall Street bank said in a research report on Thursday.

In the note led by strategist Nikolaos Panigirtzoglou, the bank outlined a more tempered view of the sector’s trajectory, arguing that crypto-native demand, not broader payment adoption, remains the primary driver of stablecoin usage.

“We find forecasts for an exponential expansion of the stablecoin universe rom $250 billion currently to $1 trillion-$2 trillion over the coming years as far too optimistic,” the team wrote.

Stablecoins are cryptocurrencies whose value is tied to another asset, such as the U.S. dollar or gold. They play a major role in cryptocurrency markets, providing among other things a payment infrastructure, and are also used to transfer money internationally.

According to the bank’s analysts, roughly 88% of stablecoin demand today comes from crypto-native activity, including trading, decentralized finance (DeFi) collateral, and idle funds held by crypto firms, with payments accounting for just 6%.

Even under generous assumptions, the growth of stablecoin use in payments would only marginally increase overall market size, the report said.

JPMorgan also dismissed the likelihood of a large-scale shift from traditional bank deposits or money market funds into stablecoins, citing the lack of yield and added friction in moving between fiat and crypto.

The firm’s analysts pushed back on comparisons with China’s e-CNY or the rise of Alipay and WeChat Pay, noting that these systems are centralized and not representative of how stablecoins operate.

Ultimately, the bank sees moderate, crypto-driven growth as the most realistic path for stablecoins, not a mass adoption story.

Some banks are more bullish than JPMorgan about the outlook for stablecoins.

The Guiding and Establishing National Innovation for U.S. Stablecoins (Genius) Act is expected to be passed in the U.S. in the coming months, and that could trigger an almost 10-fold jump in stablecoin supply, investment bank Standard Chartered said in a research report in April.

U.S. legislation “would further legitimize the stablecoin industry,” the bank’s analysts wrote at the time, adding that “we estimate this would cause total stablecoin supply to rise from $230 billion today to $2 trillion by year-end 2028.”