TLDR
- Citi revises stablecoin market cap forecast to $1.9 trillion base, $4 trillion bull case by 2030.
- Stablecoin market reached $280 billion in September, with annual settlements exceeding $18 trillion.
- Citi sees stablecoins reshaping the financial system, alongside tokenized deposits.
- Stablecoins’ growth driven by US GENIUS Act and global interest in issuing national-backed tokens.
Citi Raises Stablecoin Market Cap Forecast to $4 Trillion by 2030
Citi analysts have updated their forecast for the stablecoin market, predicting a market capitalization of $4 trillion by 2030 in the best-case scenario. This update reflects significant growth in the sector over the last six months. The bank’s analysts now anticipate a base case of $1.9 trillion, up from an earlier projection of $1.6 trillion. The previous bull case was $3.7 trillion. This optimistic outlook follows a surge in stablecoin market cap, which surpassed $280 billion in September.
The growth of stablecoins, which now exceed $18 trillion in annual settlements, has outpaced traditional payment systems such as Visa and Mastercard. Citi’s analysis indicates that stablecoins have become an integral part of the financial ecosystem.
Stablecoins’ Role in Financial System Transformation
Citi believes that stablecoins will not disrupt the traditional banking sector. Instead, they will contribute to a transformation of the financial system. The bank’s analysts argue that concerns about the disintermediation of banks are overstated. Rather than replacing banks, stablecoins will help reimagine financial infrastructure by complementing existing tools, such as tokenized bank deposits.
Citi notes that the stablecoin market’s growth is being spurred by regulatory clarity. The U.S. government’s passage of the GENIUS Act, a law that provides a comprehensive regulatory framework for stablecoins, has provided greater certainty to the market. This regulatory clarity has encouraged further innovation and adoption, not only in the U.S. but globally.
Sovereign Governments Eye Stablecoin Integration
The stablecoin market’s growth has prompted several sovereign governments to consider their own digital currencies. Notably, China, which has historically been resistant to cryptocurrencies, is now reportedly exploring the idea of launching yuan-backed stablecoins. This shift reflects the increasing importance of stablecoins in the global financial system and the desire of countries to strengthen their fiat currencies’ international reach.
In March, U.S. Treasury Secretary Scott Bessent highlighted the role stablecoins could play in extending the global influence of the U.S. dollar. Stablecoins allow for more accessible cross-border payments, which could benefit the U.S. by making its currency more widely used. Other countries are also exploring the potential of stablecoins, particularly in international markets.
Regulatory Developments Drive Stablecoin Growth
Regulatory frameworks like the GENIUS Act have played a critical role in the rapid expansion of the stablecoin market. This act establishes clear guidelines for the issuance and use of stablecoins, promoting innovation while ensuring financial stability. As a result, the stablecoin market has matured, attracting institutional players and broadening its use case.
Citi’s updated forecast reflects the increased institutional interest and the growing adoption of stablecoins in various sectors. As the regulatory landscape continues to evolve, stablecoins are likely to become more integrated into traditional financial systems. This shift could further enhance the role of digital currencies in global trade and financial transactions.
