Citigroup Predicts Stablecoin Market Cap to Reach $3.7 Trillion in Five Years

The year 2025 could mark a breakthrough in institutional adoption of blockchain technology, with stablecoins acting as a key driver. This forecast was presented in a report by Citigroup.

“The total outstanding supply of stablecoins will grow to $1.6 trillion by 2030 in the base scenario and to $3.7 trillion in a bullish scenario,” wrote the financial conglomerate’s experts.

According to their assessment, the dominance level of dollar-pegged coins at 90% will persist amid other countries’ promotion of CBDCs in national currencies.

The regulatory framework for stablecoins in the US could stimulate demand for the country’s government bonds from coin issuers, who will become the largest collective holder of US Treasuries, Citigroup suggested.

“Stablecoins pose a certain threat to traditional banking ecosystems through deposit substitution. However, they are likely to offer financial institutions opportunities to open new services,” the report’s authors warned.

Citigroup believes that the integration of digital assets alongside favorable regulation will drive blockchain adoption in government and the public sector. The technology’s emphasis on transparency and accountability will be a key driver.

“Key use cases for blockchain here include: tracking expenditures, subsidy payments, maintaining government records, humanitarian aid campaigns, asset tokenization, and digital identification,” the experts stated.

Initially, on-chain activity volumes in the public sector may be small due to high risks and numerous emerging issues. However, interest from this segment will be an important signal for broader technology adoption, Citigroup emphasized.

Earlier, Standard Chartered suggested that the market capitalization of stablecoins could grow to ~$2 trillion by 2028.