Reported by The Block: Citigroup said in a new report that its base case is that stablecoin supply grows to $1.6 trillion by 2030 and its bullish case is $3.7 trillion.
The banking giant also said this year could be blockchain’s “ChatGPT moment.”
Banking giant Citigroup hinted in a new report released Thursday that blockchain might be on the cusp of having its "ChatGPT moment" this year in part due to stablecoin adoption. The bank predicts that the total stablecoin market cap could increase by a factor of 10 by the end of the decade, exploding from its current supply of nearly $240 billion to over $2 trillion.
"The total outstanding supply of stablecoins could grow to $1.6 trillion by 2030 in our base case and to $3.7 trillion in our bull case," Citigroup said in its report, noting that "adoption in the financial and public sector, driven by regulatory change" has the potential of causing the cryptocurrency market to undergo an historic transformation.
Citigroup also hedged its estimates of the future stablecoin market by saying that it may only reach $500 billion "if adoption and integration challenges persist."
On the heels of President Trump's crypto-friendly administration assuming power earlier this year Congress is currently weighing stablecoin legislation that could lead to explosive growth with massive traditional banks like Bank of America keen to enter the business of issuing U.S. dollar-backed crypto tokens. Both the Senate and the House have bills up for consideration.
"A U.S. regulatory framework for stablecoins could drive net new demand for U.S. Treasuries, making stablecoin issuers among the biggest holders of U.S. Treasuries by 2030," Citigroup also said. Tether , the world's largest stablecoin issuer, holds tens of billions of dollars in U.S. Treasuries, according to its most recent reserves report.
In its report, Citigroup said stablecoins could "pose some threat to traditional banking ecosystems via deposit substitution." Through lobbying organizations, some banks are attempting to urge lawmakers to pass stablecoin legislation which would limit what type of companies can issue the USD-pegged tokens.
Stablecoins
