J.P. Morgan Slashes Stablecoin Growth Forecast by 2028, Citing Lack of Real-World Adoption
J.P. Morgan has significantly revised its outlook for stablecoin market growth, predicting the sector will only reach $500 billion by 2028. A sharp contrast to the trillion-dollar projections circulating in the crypto industry. The global banking giant described such lofty estimates as “far too optimistic,” citing a lack of substantial mainstream. These typically tied to the U.S. dollar.
While initially used primarily for crypto trading, stablecoins have started gaining traction among fintech companies and traditional financial institutions. Seeking faster, more efficient payment and settlement systems. This growing interest has not gone unnoticed by U.S. lawmakers, especially after the recent Senate approval of the GENIUS Act. A bill expected to provide long-awaited regulatory guidance for stablecoin issuers.
Before this legislative milestone, several financial institutions had painted a much rosier picture for stablecoin growth. Standard Chartered had projected the market could hit $2 trillion by 2028, and a recent Bernstein report estimated that supply could surge to $4 trillion over the next ten years.
However, J.P. Morgan’s latest analysis tells a different story. The bank noted that about 6% of stablecoin demand roughly $15 billion. That is currently driven by payment use cases. The majority of stablecoin activity remains confined to cryptocurrency trading, decentralized finance (DeFi), and collateral usage. The current market cap stands at approximately $250 billion.
“The notion that stablecoins will soon replace traditional money for everyday transactions is still a distant reality,” the firm stated in its report.
J.P. Morgan also highlighted several barriers that hinder stablecoin expansion beyond the crypto space. These include limited practical applications, fragmented regulatory frameworks, and modest international uptake, especially as many nations prioritize the development of their own central bank digital currencies (CBDCs) or work to enhance their existing financial systems.
For instance, in June, China’s central bank governor reaffirmed the country’s commitment to expanding the global use of its digital currency, the e-CNY. In parallel, Ant Group, a key affiliate of Alibaba, announced plans to apply for a license to issue stablecoins in Hong Kong via its overseas division, Ant International, which operates the widely used Alipay mobile payment app.
Despite these developments, J.P. Morgan remained cautious. “Success of platforms like Alipay and WeChat Pay, should not be seen as blueprints. For the future stablecoin adoption,” the report concluded.
