J.P. Morgan has significantly cut its forecast for stablecoin market growth, predicting the market will reach just $500 billion by 2028, far below earlier projections of $1–$4 trillion. The banking giant called trillion-dollar expectations “far too optimistic” and pointed to the lack of mainstream payments adoption as a key barrier.
Stablecoin Usage Remains Largely Confined to Crypto Markets
Despite increasing interest from fintech firms and traditional banks, stablecoins—cryptocurrencies typically pegged to the U.S. dollar—still primarily serve the crypto trading, DeFi, and collateral sectors. J.P. Morgan estimates that only 6% of stablecoin demand, or about $15 billion, is currently tied to real-world payments.
The total stablecoin market cap stands at around $250 billion, according to the firm. “The idea that stablecoins will replace traditional money for everyday use is still far from reality,” J.P. Morgan stated in its report.
Earlier Forecasts Were More Bullish
Before the U.S. Senate passed the GENIUS Act—a bill expected to bring regulatory clarity to stablecoins—other analysts issued more aggressive projections:
- Standard Chartered estimated the market could hit $2 trillion by 2028.
- Bernstein, in a June 30 research note, predicted stablecoin supply could grow to $4 trillion over the next decade.
However, J.P. Morgan argues that these projections overlook major adoption and regulatory hurdles, especially outside the crypto ecosystem.
Regulatory Challenges and Limited Use Cases Hold Back Growth
Stablecoin adoption continues to face fragmented global regulations and limited integration into traditional financial systems. Most countries are focused on developing central bank digital currencies (CBDCs) or enhancing their own domestic payment networks rather than adopting stablecoins.
In June, the People’s Bank of China pledged to expand global usage of its digital yuan (e-CNY). Meanwhile, Ant Group—an affiliate of Alibaba—announced plans to apply for a stablecoin license in Hong Kong via its international arm, Ant International, which operates the popular mobile payments app Alipay.
Still, J.P. Morgan remains cautious: “Neither the rapid expansion of e-CNY nor the success of Alipay and WeChat Pay represent templates for stablecoin expansion in the future,” the report stated.
GENIUS Act Sparks Hope for U.S. Regulatory Framework
The GENIUS Act, passed by the U.S. Senate last month, is viewed as a pivotal step toward regulating stablecoins in the United States. Market analysts believe the bill could provide long-awaited clarity, encouraging responsible innovation and institutional involvement in the sector. However, the impact of the legislation remains to be seen as it awaits progress in the House of Representatives.
Conclusion
While stablecoins continue to gain visibility and attract institutional interest, J.P. Morgan’s $500 billion forecast highlights the challenges of expanding beyond crypto-centric applications. Until clear regulations and stronger real-world use cases emerge, stablecoins may fall short of the trillion-dollar valuations some analysts envision.
