Stablecoin Market to Hit $500B, Not $2T: J.P. Morgan Counters Overly Bullish Projections

TLDR:

• J.P. Morgan predicts the stablecoin market will grow to $500B, not $1T, by 2028.
• Only 6% of stablecoin activity is tied to payments; the rest remains crypto-native.
• Regulatory fragmentation continues to stall broader stablecoin adoption.
• Growth remains speculative; real-world financial integration is still limited.

J.P. Morgan has scaled down future growth expectations for the stablecoin sector, forecasting a market value of $500 billion by 2028. 

This figure contrasts sharply with previous projections that suggested stablecoins could reach the trillion-dollar mark. The bank cited limited adoption outside crypto trading and slow regulatory progress as major constraints. 

Despite increasing attention from financial institutions, broader public use has not materialized. Stablecoins remain primarily used within digital asset markets, not in everyday financial transactions.

Stablecoin Usage Still Concentrated in Crypto Markets

According to J.P. Morgan, stablecoins are still predominantly used for crypto trading, decentralized finance (DeFi), and as collateral. 

These applications account for the vast majority of current demand. Payment use remains minimal, making up only $15 billion, or about 6% of total activity. 

Analysts at the firm explained that while interest from fintech firms and banks is growing, these efforts haven’t shifted the balance.

J.P. Morgan forecasts the stablecoin market will reach $500 billion by 2028, well below previous trillion-dollar projections. Usage remains concentrated in crypto trading, DeFi, and collateral, with payment applications making up only $15 billion, or 6% of total demand. Broader…

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The bank also estimated the total stablecoin market at roughly $250 billion today. This figure includes various dollar-pegged tokens widely used on exchanges and in blockchain ecosystems. However, the limited movement into mainstream commerce signals that stablecoins are far from replacing traditional money.

Before this latest forecast, other financial institutions painted a more optimistic scenario. Standard Chartered had suggested the stablecoin market could grow to $2 trillion by 2028. Bernstein also projected the market could expand to $4 trillion over the next decade. 

But J.P. Morgan remains cautious, saying these estimates overlook regulatory barriers and real-world utility.

The report, shared by Reuters, emphasized that current market growth is driven by speculative demand and crypto-native applications, not broad-based financial integration. Without significant progress in regulation and real-world use cases, growth will likely stall below the trillion-dollar threshold.

Fragmented Regulation Slows Momentum

Fragmented global regulation remains a key challenge. J.P. Morgan pointed out that differing approaches to stablecoins across jurisdictions hinder global expansion. Many countries are instead focusing on their central bank digital currencies or improving existing payment systems.

China, for example, is advancing the digital yuan for cross-border use. Meanwhile, Ant Group has revealed plans to enter the stablecoin space via Hong Kong. Despite these developments, J.P. Morgan believes these models don’t offer a clear roadmap for global stablecoin adoption.

Still, legislative efforts are gaining momentum. The recent passage of the GENIUS Act in the U.S. Senate marked a step toward regulatory clarity. Analysts believe such measures could eventually open the door for stablecoins to expand beyond crypto-focused use. 

For now, however, J.P. Morgan remains firm in its position that mainstream stablecoin use is not yet close.

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