Stablecoins are viewed as a key method of bringing dollars into the blockchain, with investors and regulators betting on their potential to transform cross-border payments. After U.S. Treasury Secretary Scott Bessent recently stated at a Senate hearing that "market capitalization will exceed $2 trillion by 2028," market sentiment instantly soared. However, Wall Street veteran JPMorgan Chase threw cold water on this prediction, suggesting the growth won't be that fast.
Morgan Stanley Sings a Different Tune
The U.S. Treasury Secretary's statement added weight to the recently passed 'GENIUS Act', a federal framework targeting reserve and regulatory requirements for dollar-pegged stablecoins, theoretically eliminating legal gray areas. The short-term positive news immediately reflected in stablecoin market capitalization, with total stablecoin amount expected to exceed $250 billion in the first half of 2025. Compared to the $2 trillion target, it seems to be just 4 times away.
However, JPMorgan Chase's fixed income analyst Teresa Ho's team emphasized in their latest report:
It's difficult to believe the market can grow significantly in the coming years, as the infrastructure and ecosystem supporting stablecoins are far from mature and will require time to develop.
JPMorgan predicts the total stablecoin market value will be around $500 billion by 2028, only a quarter of the most optimistic forecast.
Trading is Hot, but Payment Applications are Lagging
JPMorgan pointed out that currently about 88% of demand still comes from crypto-native activities: on-chain transactions, DeFi collateral, and funds from crypto enterprises. Payment scenarios only account for about 6%, with an even lower proportion in global capital flows.
Why is consumer adoption slow? JPMorgan notes that stablecoins in wallets are mostly non-interest-bearing or offer low interest rates, making it difficult to compete with bank savings accounts or money market funds. Additionally, converting fiat to on-chain assets involves transaction fees, KYC, and time costs. Investors typically view cash as their last line of defense and won't easily abandon traditional channels unless liquidity, returns, and safety are all in place.
On the technical side, blockchain scalability, interoperability, and usability still face bottlenecks. Potential smart contract vulnerabilities, oracle attack risks, and historical hacking incidents mean large institutions must establish more rigorous risk controls before adoption.
The 'GENIUS Act' Brings Certainty and Raises Barriers
The act requires all dollar stablecoins to hold equivalent cash or Treasury securities and undergo state or federal agency audits. This compliance procedure will indeed help attract banks, fintech companies, and credit unions, and will strengthen the U.S. dollar's position in global digital finance in the long term.
However, JPMorgan warns that compliance itself is a cost: licensing, auditing, and monitoring procedures will squeeze out small and medium-sized businesses. Moreover, fragmented regulations across countries mean enterprises face repeated reviews and legal conflicts when expanding cross-border, thus limiting their growth speed.
