JPMorgan pours cold water again: The trillion-dollar stablecoin market by 2028 may be difficult to achieve

Global banking giant JPMorgan recently expressed cautious views on the growth prospects of the stablecoin market. The bank’s analyst team reaffirmed their expectation that by 2028, the total market capitalization of global stablecoins will reach approximately $500 billion to $600 billion, well below the optimistic forecasts of other market institutions predicting $2 trillion to $4 trillion. The core logic behind this is that current stablecoin demand is primarily driven by crypto trading activities, and the expansion of payment scenarios may not linearly increase market cap due to increased circulation velocity and fierce competition from bank tokenized deposits and central bank digital currencies (CBDCs). This viewpoint reveals a fundamental disagreement between traditional financial institutions and the crypto-native world when assessing the future landscape of digital assets.

Bearish Logic: Why JPMorgan Diverges from the Trillion-Dollar Expectation

JPMorgan’s analysis is not a sudden whim but a reaffirmation of its consistent viewpoint. Led by Managing Director Nikolaos Panigirtzoglou, the analyst team pointed out in their latest report that although the stablecoin market achieved significant growth by 2025, with a total market cap increase of about $100 billion to surpass $300 billion, the growth structure exposed its fundamental drivers. Notably, Tether’s USDT and Circle’s USDC account for the vast majority of incremental growth, mainly benefiting from crypto derivatives trading, DeFi lending, and the idle funds management needs of crypto venture capital firms.

The analysts believe this pattern reinforces their long-term judgment: stablecoins are essentially “cash equivalents” within the crypto ecosystem, and their growth trajectory will align with the overall market cap expansion of cryptocurrencies, rather than experiencing independent, explosive surpassing. Therefore, they set their 2028 market size expectation at $500 billion to $600 billion and already in May 2025 called others’ trillion-dollar forecasts “overly optimistic.” This conservative outlook stems from a narrow definition of stablecoin functionality—primarily as a trading tool rather than a protagonist in the payment revolution.

Payment Application Paradox: Circulation Velocity as the “Enemy” of Market Cap

A common market misconception is that the more widespread stablecoins are in payments, the higher their total market cap must be. JPMorgan’s report challenges this intuition. The analysts introduce a key concept: circulation velocity. When stablecoins are more deeply integrated into payment systems, especially in high-frequency, small-value daily transactions, the number of times a unit of stablecoin changes hands within a year (i.e., circulation velocity) will significantly increase.

Using USDT on Ethereum with an annual circulation velocity of about 50 times as an example, the report performs an insightful projection: assuming future stablecoin handles $10 trillion in cross-border payments annually (about 5% of global total), then theoretically, only $200 billion in stablecoin supply as “working capital” would be needed to meet demand. This implies that the success of payment applications could actually reduce the need for large static stablecoin holdings. It overturns the simple linear thinking of “wider use equals larger market cap,” highlighting that future competition will hinge on payment efficiency and ecosystem integration rather than mere asset accumulation.

JPMorgan’s Stablecoin Market Forecast Compared to Peers

To understand the depth of this divergence, placing JPMorgan’s cautious forecast alongside other mainstream institutions’ optimistic outlooks becomes very clear:

Dual Front: Banks and Central Banks’ “Official Forces” Are Entering

JPMorgan’s deeper reason for being bearish on the stablecoin market cap is the imminent rise of strong competitors from within the traditional financial system. The report emphasizes two forces: tokenized bank deposits and central bank digital currencies (CBDCs).

First, major commercial banks are not sitting idly by as stablecoins develop. They are actively promoting the tokenization of traditional bank deposits—digital debt certificates retained within regulated banking systems, enjoying deposit insurance, and inherently attractive to institutional investors for safety and compliance. In fact, JPMorgan itself has launched a dollar-denominated deposit token, JPM Coin, via its blockchain division Kinaxis, on Coinbase’s Ethereum Layer 2 network Base. The report suggests that this “non-transferable” tokenized deposit design is more favored by regulators because it maintains monetary uniformity and reduces financial stability risks, potentially squeezing stablecoins’ share in international payment settlements in the future.

Second, major central banks worldwide are advancing CBDC projects, such as the digital euro and digital yuan, aiming to provide a regulated public digital payment option. These CBDCs could directly replace the demand for privately issued stablecoins in large-scale and cross-border payment scenarios. The entry of these two “official forces” will pose a long-term structural challenge to the existing stablecoin landscape from both compliance and official trust perspectives.

Market Insights: From Scale Competition to Value Reassessment

JPMorgan’s report offers profound insights to the market. It forces investors to reevaluate the valuation logic of stablecoin projects: future winners may no longer be those solely pursuing maximum circulation, but rather those with high stickiness within specific ecosystems and capable of generating stable cash flows.

Meanwhile, the integration of traditional financial infrastructure with crypto-native systems is accelerating. Whether it’s JPMorgan issuing JPM Coin or recent rumors that NYSE parent ICE is negotiating to invest in crypto payment company MoonPay, it indicates that giants are actively laying out the next-generation financial network. For example, MoonPay has shifted from a payment gateway to a full-stack infrastructure provider for issuing and managing customized stablecoins, integrating with M0 platform, and collaborating with Exodus to launch a dedicated digital dollar. This reveals another trend: the value of stablecoins as “functional modules” may surpass their value as “independent assets.”

Ultimately, the market may gradually accept JPMorgan’s envisioned picture: a hybrid system where multiple forms of digital dollars (private stablecoins, bank tokens, CBDCs) coexist and collaborate. In this system, the total market cap of stablecoins may struggle to reach the trillion-dollar ceiling, but their core role as the blood of the crypto economy and catalysts for financial innovation could become more solid and irreplaceable amid fierce competition.