JPMorgan Reiterates Stablecoin Will Not Form a Trillion-Dollar Market
JPMorgan, led by Managing Director Nikolaos Panigirtzoglou, reiterated that the stablecoin market will not reach a trillion-dollar scale by 2028 as some institutions predict, and the actual demand for stablecoins is not as strong as the market imagines.
The JPMorgan team pointed out that current demand for stablecoins is still primarily tied to the activity of the crypto ecosystem itself, rather than widespread adoption from the mainstream financial system; the institutional use of stablecoins is mainly focused on their role as cash or collateral for crypto trading (including derivatives trading and DeFi lending), rather than for broader payment or settlement scenarios.
Specifically regarding scale predictions, the team maintained its previous forecast from July 2025 of a stablecoin market size of $500 billion to $600 billion by 2028, clearly labeling some institutions' forecasts of $2 trillion to $4 trillion as "overly optimistic."
The core argument of the JPMorgan team is that the growth of the stablecoin market size will follow the overall trend of the cryptocurrency market, rather than expanding independently of the crypto market; they specifically noted that "an increase in the use of stablecoins in payment scenarios does not necessarily mean that the required circulating supply will grow significantly," as the velocity of money is more critical than absolute supply size.
In terms of data, the team disclosed that the current stablecoin market size has exceeded $300 billion (with an increase of about $100 billion expected in 2025), including approximately $48 billion in new USDT, about $34 billion in USDC growth, and an increase of about $20 billion in stablecoins held by derivatives exchanges; the annualized circulation velocity of USDT on Ethereum is about 50 times.
From a market mechanism perspective, JPMorgan's analysis effectively delineates the "demand boundary" for stablecoins—indicating that currently and for the foreseeable future, the core use scenarios for stablecoins remain concentrated within the crypto asset trading ecosystem (as trading margins, DeFi collateral, etc.), rather than penetrating into broader institutional scenarios such as traditional payments and cross-border settlements; if this judgment holds, it implies that the narrative of "stablecoins penetrating traditional institutional payments" backed by previous investments from companies like Visa, Circle, and Ripple in stablecoin payment infrastructure may materialize more slowly than the market expects. Additionally, the report mentioned tokenized bank deposits (such as JPMorgan's own JPM Coin), SWIFT's blockchain-related initiatives, and central bank digital currencies (CBDCs) like the digital euro and digital yuan, which may further limit the market share of stablecoins in institutional payment scenarios. Who benefits: Traditional banks like JPMorgan that launch their own tokenized deposit products may face less pressure from stablecoin alternatives in the competition for institutional payment scenarios than previously expected; who is under pressure: stablecoin payment infrastructure startups that previously based their valuations and financing on the optimistic narrative of "rapidly increasing stablecoin institutional penetration" may need to recalibrate their growth expectations according to JPMorgan's more conservative scale predictions.
Source: Public Information
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JPMorgan has historically maintained a relatively cautious stance on crypto assets—its CEO Jamie Dimon has publicly criticized Bitcoin multiple times, while the company was also the first to launch a tokenized deposit product, JPM Coin, for interbank instant settlements in 2019; this dual attitude of "publicly cautious criticism while actively building tokenized infrastructure internally" has long been JPMorgan's consistent style in dealing with innovations in the crypto asset field, and the analysis team's cautious judgment on institutional demand for stablecoins continues this style.
From the perspective of resource and research investment, the core resource of JPMorgan's analysis lies in its ongoing tracking capability of on-chain data (such as specific growth amounts of USDT and USDC, and circulation velocity on Ethereum); this data-driven research is itself a research service product that JPMorgan provides to institutional clients; by continuously outputting conservative stablecoin size forecasts, JPMorgan is effectively seeking more institutional client recognition for its own tokenized deposit product (JPM Coin)—that is, "instead of betting on the uncertain prospects of the stablecoin ecosystem, it is better to use the bank's own backed tokenized deposit product."
Similar historical precedents of "traditional financial institutions giving conservative size forecasts for emerging financial technologies while building alternative internal products" include traditional banks publicly questioning the scale expansion prospects of third-party payment platforms while accelerating the development of competitive product lines like online banking and mobile banking in the early stages of electronic and mobile payments. The current stage of the stablecoin industry is a critical validation period transitioning from "crypto-native assets" to "whether they can penetrate traditional institutional payment and settlement systems," and the conservative predictions given by traditional banks like JPMorgan are, to some extent, part of the public discourse in this penetration battle.
This essentially represents a defensive research statement from traditional financial institutions in the "technological replacement" process: JPMorgan's conservative predictions objectively create more market recognition space and time windows for its own tokenized deposit products and the blockchain upgrade paths of traditional clearing networks like SWIFT. Mechanically, whether stablecoins can truly replace traditional bank settlement systems fundamentally depends on whether they can break through the boundary of "internal circulation within the crypto ecosystem" and penetrate into real institutional-level payment and fund management scenarios; JPMorgan's analysis essentially emphasizes that this breakthrough has not yet truly occurred, and stablecoins are currently more of a "fuel" within the crypto market rather than an alternative infrastructure for the traditional financial system.
ABAB News · Cognitive Laws
Those who give conservative forecasts often have alternatives in hand.
Velocity is a better indicator of real demand than stock size.
Prosperity within the ecosystem is not a victory in penetrating the outside.