JPMorgan has projected that the stablecoin market is likely to grow to $500 billion by 2028. However, this prediction contrasts sharply with more aggressive forecasts estimating the market could hit between $1 trillion and $2 trillion within the same period.

Key Insights:

• According to the bank’s analysts, only 6% of stablecoin demand currently arises from payments.
• The notes led by strategist Nikolaos Panigirtzoglou outlined a more conservative outlook, stressing that demand driven from cryptocurrency activities is what primarily fuels stablecoin utilization.

“We find forecasts for an exponential expansion of the stablecoin universe from $250 billion currently to $1 trillion-$2 trillion over the coming years as far too optimistic,” the team wrote.

Translation: “We find forecasts for an exponential expansion of the stablecoin universe from $250 billion currently to $1 trillion-$2 trillion over the coming years as far too optimistic.”

Stablecoins play a critical role in the cryptocurrency ecosystem, acting as a bridge for transactions and holdings. This report reaffirms that the majority of the current demand is rooted in trading and DeFi (Decentralized Finance), rather than mainstream payment use.

JPMorgan further dismissed comparisons to centralized payment systems such as China’s e-CNY or Alipay, arguing they do not reflect smart contract technology operation.

In contrast, some banks hold an optimistic view of the future for stablecoins, suggesting that legislative movements in the U.S. could catalyze significant growth in the stablecoin sector.

To conclude, JPMorgan is adopting a more cautious outlook on stablecoin expansion amidst prevailing exuberance in market expectations.