JPMorgan Says Stablecoins Unlikely to Hit $1T, Sees $600B Cap by 2028

Why Doesn’t JPMorgan view a $1 Trillion Stablecoin Market?

JPMorgan analysts say the stablecoin market is unlikely to reach trillion-dollar levels over the next few years, arguing that growth remains closely tied to crypto trading activity rather than mainstream payments. In a report published Wednesday, the bank projected total stablecoin market capitalization at roughly $500 billion to $600 billion by 2028—well below more bullish forecasts circulating in the market.

The stablecoin universe has expanded rapidly this year, growing by about $100 billion to exceed $300 billion in total supply. But JPMorgan says that expansion reinforces, rather than challenges, its existing view. Growth remains concentrated in the two largest coins. Tether’s USDT increased supply by about $48 billion this year, while Circle’s USDC added roughly $34 billion, accounting for most of the market’s net growth.

According to the analysts, led by managing director Nikolaos Panigirtzoglou, this pattern shows that stablecoins continue to scale alongside instead of breaking out into an independent growth path driven by payments adoption.

Investor Takeaway

What Is Actually Driving Stablecoin Demand Today?

The report reiterates JPMorgan’s long-held view that stablecoin demand is still anchored inside the crypto ecosystem. Most usage comes from stablecoins acting as cash or collateral for derivatives trading, decentralized lending and borrowing, and balance-sheet liquidity for crypto-native firms such as venture funds and market makers.

Derivatives activity remains a key factor. This year alone, derivatives platforms increased their stablecoin balances by about $20 billion, fueled by a surge in . The analysts describe this activity as the primary engine behind stablecoin issuance, outweighing growth from retail payments or remittances.

As a result, JPMorgan expects stablecoin supply to continue rising in line with overall rather than outpacing it. “The stablecoin universe is likely to continue to grow over the coming years broadly in line with the overall crypto market cap,” the analysts wrote, projecting a ceiling of $500 billion–$600 billion by 2028.

That estimate contrasts sharply with other forecasts. Citi analysts have suggested stablecoins could reach $1.9 trillion by 2030 under a base scenario, or up to $4 trillion in a more aggressive case. Standard Chartered has projected a $2 trillion market by 2028. JPMorgan has previously described those figures as overly optimistic.

Does Payments Adoption Actually Require More Stablecoins?

While stablecoins are increasingly used in payments, the analysts caution against assuming that broader usage automatically demands a much larger supply. Instead, they focus on velocity—the rate at which stablecoins circulate—as the more relevant metric.

“As payment adoption increases, on-chain activity and velocity will likely rise, reducing the need for a large stock of stablecoin holdings,” the analysts wrote. They pointed to USDT’s annual velocity on ETH, which sits around 50. At that rate, even if stablecoins handled about 5% of global cross-border payments—roughly $10 trillion annually—the required outstanding supply would be only about $200 billion.

This dynamic, JPMorgan argues, fragileens the case for exponential supply growth driven by payments alone. quicker turnover means the identical pool of stablecoins can support much higher transaction volumes without requiring massive issuance.

Investor Takeaway

How Do Tokenized Deposits and CBDCs Change the Equation?

The analysts also highlighted growing competition from tokenized bank deposits and central . Unlike stablecoins, tokenized deposits remain inside the regulated banking system and are backed by traditional deposits, often with deposit insurance.

JPMorgan itself launched a token last month through its blockchain unit Kinexys. The product, JPM Coin (ticker JPMD), runs on Base, Coinbase’s ETH layer-2 network, and targets institutional clients viewking onchain settlement without stepping outside bank balance sheets.

“JPM Coin provides JPMorgan’s institutional clients with the option to make onchain native digital payments, which serve as a digital representation of a bank deposit on public blockchain,” the bank said at the time. The analysts noted that regulators generally favor non-transferable designs for such tokens to limit run risk and preserve what they call the “singleness of money.”

They also pointed to initiatives such as SWIFT’s blockchain payment trials and central bank projects like the digital euro and digital yuan as additional pressure points. These alternatives could absorb institutional demand for digital settlement while keeping it within regulated frameworks, reducing reliance on privately issued stablecoins.

What’s the Bottom Line for Stablecoins?

JPMorgan’s conclusion is straightforward: stablecoins will keep growing, but mostly as a function of crypto market expansion rather than a payments-driven revolution. Even wider use in settlement and commerce does not, in the bank’s view, require a dramatic increase in outstanding supply.

“In all, we continue to anticipate stablecoin growth broadly in line with the overall crypto market universe,” the analysts wrote. As banks roll out tokenized deposits and central banks advance digital currency projects, stablecoins may face more competition precisely where many expect them to grow quickest.