JPMorgan Cuts Stablecoin Market Forecast to $500B by 2028

JPMorgan Slashes Stablecoin Market Predictions to $500 Billion by 2028

A recent JPMorgan report has delivered a conservative outlook for the stablecoin market, forecasting growth to just $500 billion by 2028. This projection represents a significant reduction from optimistic industry predictions that suggested the market could reach $2.5 trillion within the same timeframe.

Banking Giant Remains Skeptical of Stablecoin Growth Potential

JPMorgan's analysis reveals that stablecoin adoption remains heavily concentrated within cryptocurrency ecosystems. The report shows that 88% of current stablecoin demand stems from crypto-related activities including trading, decentralized finance operations, and reserves held by cryptocurrency companies.

Payment usage accounts for merely 6% of stablecoin transactions, equivalent to approximately $15 billion. These statistics highlight the limited penetration of stablecoins as mainstream payment instruments in the broader economy.

Barriers to Mainstream Stablecoin Adoption

The investment bank identifies several obstacles preventing stablecoins from replacing traditional currencies in the near term. Key challenges include insufficient attractive yields and conversion barriers between fiat currencies and cryptocurrencies.

However, market research presents a contrasting picture. A comprehensive survey of 259 global institutions revealed that 49% currently utilize stablecoins for payment purposes, while an additional 41% are actively testing or planning stablecoin implementation.

Digital Currency Models Face Scrutiny

JPMorgan dismisses the applicability of successful digital payment models to stablecoin development. The bank argues that systems like China's digital yuan expansion and the widespread adoption of Alipay and WeChat Pay cannot serve as templates for stablecoin growth trajectories.

Competing Forecasts Paint Rosier Picture

Several industry forecasts maintain significantly more optimistic projections for stablecoin market expansion. US Treasury Secretary Scott Bessent previously predicted that USD-backed stablecoin markets could exceed $2 trillion by 2028, supported by regulatory clarity from legislation like the GENIUS Act passed by the US Senate in June 2025.

Additional market analysis suggests the stablecoin sector could reach $2.5 trillion, driven by increasing institutional interest and growing integration into commercial transactions.

Current Market Dynamics Show Strong Growth

Despite differing predictions, the stablecoin market continues demonstrating robust expansion, with total market capitalization surpassing $264 billion. This growth reflects ongoing adoption across various financial sectors.

The dominance of stablecoins in over-the-counter cryptocurrency trading provides additional momentum. According to Finery Markets data, stablecoins now represent 74.6% of institutional OTC trading volume in the first half of 2025, marking a substantial increase from 46% in the previous year and 23% in 2023.

Stablecoins Gain Traction in Financial Infrastructure

Market analysts emphasize that stablecoin utility depends on seamless integration between issuance and active secondary markets. For widespread adoption, stablecoins must maintain high liquidity, easy tradability, and legal compliance across diverse trading venues.

This infrastructure development positions stablecoins as increasingly critical tools for financial transactions, particularly in cross-border payments and rapid settlement systems.

Market Outlook Remains Divided

The divergent forecasts reflect varying perspectives on stablecoin integration potential within traditional financial systems. While JPMorgan maintains conservative projections, market dynamics suggest continued growth momentum driven by institutional adoption and regulatory development.

The stablecoin market's trajectory will likely depend on addressing adoption barriers while expanding use cases beyond cryptocurrency trading into mainstream financial applications.