Citigroup predicts Stablecoin market will grow by $1.6 trillion by 2030
U.S. banking giant Citigroup expressed a highly bullish forecast for the Stablecoin market in its latest market perspective report. In addition to this interesting insight, Citigroup highlights the potential barriers and obstacles to these Fiat-PEG virtual assets.
The US regulatory framework stimulates stable growth
In a market report released last week, Citigroup will support the Stablecoin market with the goal of witnessing at least seven times the supply growth over the next five years. Multinational investment banks link this bullish stance to the obvious intention of the current U.S. government to draft policies to support the growth of the digital asset industry.
It is worth noting that in January 2025, U.S. President Donald Trump ordered the establishment of a cryptocurrency task force to create a federal regulatory framework based on the needs of nascent industries.
Citigroup believes that the establishment of this regulatory framework and the increased adoption of digital assets by existing financial institutions are expected to drive demand for stability. Defilama’s data shows that the value of the Stablecoin market has increased by 30 times as the cryptocurrency market soared by more than 1,400%.
Citigroup notes that it is difficult to make future predictions, but the current situation and past performances suggest that in the basic case of 2030, Stablecoin supply could increase by $1.6 trillion by 2030. In bullish situations, investment banks predict that stable markets could grow by $3.7 trillion, while bearish cases can only support the market growth of $0.5 trillion.
Interestingly, Citigroup also explained that a stable regulatory framework in the United States will promote the demand for US dollar risk-free assets both inside and outside the United States. This is because stable issuers must use our Treasury bonds or other low-risk assets as stable shares in each cycle.
In the basic case scenario, Bank of America expects a surge in stable demand to lead to $1 trillion in buying U.S. Treasury bonds.
What challenges do stablecoins face?
Citigroup is largely optimistic about Stablecoins’ growth potential, but may face some potential challenges that these virtual assets may face when adopted.
Stablecoin represents a virtual cryptocurrency with a fixed value that is pegged to existing Fiat currency. At present, the stable and stable US dollar is strongly dominant in the market. Therefore, other countries may view Stablecoins as a tool to maintain U.S. financial hegemony.
In this case, Citigroup expects European and Chinese countries to invest in central bank digital currencies (CBDCs) or stable currencies pegged to their local fiat currencies. Therefore, the Stablecoin market may reach 90% results by 2030.
In addition, Citigroup pointed out that in the case of potential de-pegs, there is a risk of running. Investment Banks explain that a major challenge activity could significantly reduce crypto liquidity, which could affect trading platforms and financial markets in general.
At press time, the Stablecoin market was worth $237.25 billion, and Tether (USDT) remains the market leader with a 62.65% advantage.
Featured image from the Financial Times, Charts from TradingView
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