Citigroup predicts that the market capitalization of stablecoins could exceed $1.6 trillion by 2030.

Original source: cryptoslate

Compiled by: Blockchain Knight

The stablecoin sector is entering a period of accelerated application, comparable to the early growth of generative AI tools like ChatGPT, with an expected market value surpassing $1.6 trillion by 2030.

According to a new report released by Citigroup's Global Perspectives and Solutions (GPS) team on April 24, the application scenarios of stablecoins are now expanding from the realm of crypto assets to a broader range of financial and public sector areas.

The supporting factors for this transformation include improved regulatory clarity, increased institutional interest, and global market demand for dollar-denominated digital assets.

The report draws an analogy between the early adoption phase of ChatGPT and the current growth phase of stablecoins, suggesting that 2025 will be a turning point for the further integration of stablecoins into the global economic system.

In Citigroup's optimistic forecast scenario, by 2030, the total market value of the stablecoin market could exceed $3.7 trillion. Currently, the stablecoin market size has surpassed $230 billion, growing nearly 30 times over the past five years.

Institutional Demand and Macroeconomic Driving Factors

The Citigroup report points out that progress in regulation, especially in the United States and Europe, is a key factor driving the expansion of stablecoins beyond their original roles in Crypto asset trading and DeFi.

In early 2025, the United States introduced new legislation aimed at establishing a legal framework for the issuance and reserves of stablecoins. At the same time, the EU's Markets in Crypto-Assets Regulation (MiCA) also set standards across the entire European Union.

This positive progress at the regulatory level coincides with the demand from emerging markets. In emerging markets, access to US dollars is restricted, while financial institutions are also exploring the use of stablecoin infrastructure for payments, settlements, and liquidity management.

The report points out that banks and payment providers are beginning to integrate stablecoins into the existing financial system, breaking the previous limitation of stablecoins being restricted to native applications of crypto assets. Citigroup particularly predicts that the demand for stablecoins will create new purchasing demand for U.S. Treasury bonds.

By 2030, the scale of U.S. Treasury holdings held by stablecoin issuers using secure, highly liquid assets as reserves may exceed that of any existing foreign jurisdiction. In Citibank's baseline forecast scenario, this will add more than $1 trillion in demand to the U.S. Treasury market.

Application scenarios extend beyond the realm of Crypto assets.

Although trading in crypto assets remains the largest application scenario for stablecoins, accounting for about 95% of the current stablecoin trading volume, Citibank predicts that the use of stablecoins in areas such as B2B cross-border payments, consumer remittances, and institutional capital market activities will also see growth.

Emerging markets like Argentina, Nigeria, and Turkey are also driving the adoption of stablecoins in the retail sector, as stablecoins can serve as a hedge against inflation and currency volatility. Meanwhile, due to lower costs and faster settlement speeds, remittance channels are gradually shifting from traditional methods to stablecoin-based remittance methods.

At the institutional level, large asset management companies and fintech firms are piloting stablecoin-based fund settlement, fund operation, and liquidity provision services, reflecting their confidence in the stablecoin infrastructure and regulatory environment.

Citibank compared the potential development trajectory of stablecoins to the bank card payment industry, believing that although there may be a few dominant issuers, significant participation from national entities and public-private partnership models is also expected to emerge.

This may be similar to the rise of regional card networks in countries like Brazil and India, where local regulations support domestic financial sovereignty. The report emphasizes that trust, reserve transparency, and user experience are key factors in determining which stablecoins can achieve mainstream penetration.

The report also pointed out that the long-awaited regulatory clarity has removed one of the biggest obstacles in the industry, allowing both existing participants and newcomers to build services on a more predictable legal basis.