Despite growing attention from lawmakers and financial institutions, JPMorgan estimates that only 6% of stablecoin demand—approximately $15 billion—is tied to real-world payment usage.
“The idea that stablecoins will replace traditional money for everyday use is still far from reality,” the bank stated.
Stablecoin Market Grows, but JPMorgan Questions Its Utility Beyond Trading
While stablecoins—typically pegged to the US dollar—have seen rising popularity, particularly as banks and fintech firms explore blockchain-based payment and settlement solutions, JPMorgan remains skeptical of their broader potential. The bank forecasts that the stablecoin market will grow to just $500 billion by 2028, calling trillion-dollar projections “far too optimistic.”
As of now, the total stablecoin market has reached $254 billion, up 23% since the beginning of the year. However, JPMorgan cautions that this growth does not reflect widespread real-world utility. The vast majority of usage remains confined to trading and collateral activities within crypto markets.
Optimism surged last month following the US Senate’s passage of the GENIUS Act, which aims to provide regulatory clarity for stablecoin issuance. Some institutions responded positively—Standard Chartered predicted a $2 trillion market by 2028, while Bernstein offered a long-term forecast closer to $4 trillion.
Still, JPMorgan pushed back on those bullish outlooks, pointing to weak mainstream adoption and fragmented use cases outside of crypto-native environments.
Private Stablecoins Face Continued Challenges
Although countries like China are advancing their state-backed digital currencies—such as the digital yuan—most governments remain focused on national solutions, rather than supporting privately issued stablecoins. In June, China’s central bank pledged to expand the cross-border use of its digital currency, but JPMorgan argued that examples like China’s e-CNY or the dominance of Alipay and WeChat Pay do not represent viable global models for stablecoin success.
In the private sector, signals remain mixed. Ant Group, operator of Alipay, announced plans to apply for a stablecoin license in Hong Kong. Meanwhile, US firms appear hesitant. PayPal CEO Alex Chriss recently acknowledged that stablecoins are not yet ready for mainstream use in the US, citing a lack of compelling consumer incentives.
He noted that while PayPal has started offering rewards to promote usage, “There isn’t a real incentive to drive adoption.”
JPMorgan’s Take: A Slower Path Ahead
For now, JPMorgan expects the stablecoin market to evolve more slowly than many advocates hope. Regulatory uncertainty, infrastructure limitations, and tepid demand outside of crypto trading continue to weigh on the sector’s growth trajectory.
