The global market for stablecoins is poised for significant expansion, with projections indicating a potential total issuance reaching up to $4 trillion by 2030. This forecast, originating from a recent report by Citi, suggests a substantial upward revision from previous estimates, reflecting a dynamic evolution in the digital asset landscape. Analysts at Citi highlight this burgeoning sector as a critical catalyst, potentially mirroring the transformative impact of the internet during the dot-com era, driving broader institutional adoption of blockchain technology.
Citi’s Stablecoin Projections and the “ChatGPT Moment” for Institutions
Citi’s report, authored by Ronit Ghose, Head of Future of Finance, and Ryan Rugg, Head of Crypto, presents a base-case scenario of $1.9 trillion in stablecoin issuance, alongside a more optimistic bull-case of $4 trillion. These figures represent an increase from the earlier projection of $1.6 trillion. The upward revision is attributed to anticipated robust growth in 2025 and the recent influx of new stablecoin projects from both cryptocurrency-native entities and established traditional financial institutions. The authors suggest that stablecoins are instrumental in facilitating blockchain’s “ChatGPT moment” for institutional applications, fundamentally reimagining rather than dismantling existing financial systems.
Transactional Capacity and Limitations
The report also touches upon the transactional capacity that could be unlocked by this expansion. If the current pace of stablecoin market capitalization growth, which has seen an increase from $200 billion to $280 billion in early 2025, continues, the projected $1.9 trillion in circulation could potentially support up to $100 trillion in annual transactions. While significant, this figure remains a fraction of the daily transaction volume handled by major global banks, which can range from $5 trillion to $10 trillion.
Stablecoins’ Primary Advantage: Cross-Border Payments
Despite the optimistic outlook on stablecoin growth, Citi expresses a degree of caution, emphasizing that stablecoins are not a universal panacea. The report notes that domestic payment systems in many countries already operate in real-time and at minimal cost, particularly in regions with advanced fintech infrastructures. The primary area where stablecoins could offer a distinct advantage remains cross-border payments, which are historically characterized by inefficiencies in speed and cost. However, even in this domain, fintech companies and traditional banks are actively implementing solutions to reduce transaction times and expenses.
Corporate Sentiment and Tokenized Deposits
Citi anticipates a future driven by continuous technological advancement in financial services, rather than a direct “digital format war.” A key observation from the report is the prevailing corporate sentiment towards stablecoins, which is described as more “curious rather than enthusiastic” regarding their integration into core operational activities. Many businesses are exhibiting a preference for tokenized deposits, which are regulated digital representations of traditional bank money, suggesting these could potentially facilitate a larger volume of transactions than stablecoins by 2030.
Broader Cryptocurrency Market Downturn
Concurrently with these stablecoin market projections, the broader cryptocurrency sector is experiencing a period of volatility. Major digital assets have seen notable price declines, with Bitcoin falling below $112,000 and Ethereum dropping below $4,000, its lowest point since August. This downturn follows significant liquidations of leveraged positions earlier in the week, with substantial sums being liquidated within a 24-hour period.
Factors Influencing Investor Sentiment
Investor sentiment in the crypto market is being influenced by a confluence of factors. U.S. stock markets have also seen a decline, with concerns about an overheated AI-driven rally and the Federal Reserve’s potential delay in interest rate cuts contributing to a broader risk-off sentiment. The traditional seasonal weakness often observed in September for cryptocurrencies is also a contributing factor. Furthermore, the U.S. Treasury’s efforts to replenish its accounts through the sale of Treasury bills and bonds are drawing liquidity from the market, impacting demand for riskier assets such as cryptocurrencies. Consequently, crypto-related equities, including Robinhood and Coinbase, have experienced declines, as has MicroStrategy, a significant holder of Bitcoin. Circle, a prominent stablecoin issuer, has also been affected.
Regulatory Landscape and Corporate Exploration
Regulatory bodies in the U.S. and internationally are actively engaged in discussions regarding the framework for issuing and overseeing stablecoins. Meanwhile, established companies like PayPal are expanding their stablecoin offerings, and retail giants such as Walmart and Amazon are reportedly exploring the development of their own stablecoin solutions.
Kate specializes in clear, engaging coverage of business developments and financial markets. With a knack for breaking down economic data, she makes complex topics easy to understand.