JPMorgan pushes back on Treasury’s $2 trillion stablecoin forecast, warns infrastructure is still underdeveloped

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Key Takeaways

JPMorgan disagrees with the US Treasury’s prediction that the stablecoin market will reach $2 trillion by 2028.
USDT and USDC account for over 60% of the current stablecoin market, which JPMorgan expects to only double or triple in size.

JPMorgan isn’t buying into the $2 trillion stablecoin hype. Despite growing political and institutional enthusiasm, the bank thinks the projection is “a little bit optimistic.”

According to JPMorgan’s strategists, the digital dollar-pegged asset class still lacks the robust infrastructure needed to support exponential growth. Instead of ballooning to $2 trillion, the bank expects the sector to grow at a more measured pace, likely doubling or tripling by 2028.

The global stablecoin market is currently valued at approximately $270 billion, with Tether’s USDT and Circle’s USDC dominating the sector, per CoinGecko.

“While adoption is poised to grow further, it might be at a slower pace than what some might anticipate,” the bank’s strategists stated, first reported by Bloomberg.

“We suspect liquidity investors, whether retail or institutional, are not going to immediately jump into payment stablecoins as a cash alternative given their conservative nature in terms of how they manage their cash as a source of liquidity,” they added.

Standard Chartered said in an April report that the stablecoin supply could reach $2 trillion within the next three years.

US Treasury Secretary Scott Bessent appeared to agree with the estimate. During a Senate hearing last month, Bessent said that the US dollar-backed stablecoin market could surpass $2 trillion by the end of 2028, thanks to supportive legislation like the GENIUS Act.

Enacted last Friday, the new law is expected to reinforce the dollar’s global status, especially with major banks and companies pushing into the stablecoin space.

JPMorgan is actively exploring stablecoins despite Jamie Dimon’s skepticism

JPMorgan Chase CEO Jamie Dimon confirmed during the bank’s second-quarter earnings call last week that the bank is committed to exploring stablecoin technology despite his skepticism about its utility compared to traditional payment methods.

The bank has also reportedly joined forces with Bank of America, Citigroup, and Wells Fargo to explore a joint stablecoin initiative in a bid to stay competitive against fintech developments and US legislation that creates a regulatory framework for stablecoins.

Last month, the largest US bank by total assets launched a pilot for a stablecoin-like deposit token, JPMD, for institutional clients.