Citigroup predicts that the stablecoin market will reach 3.7 trillion USD by 2030.

The stablecoin industry is entering a phase of strong growth, comparable to the early development of creative artificial intelligence tools like ChatGPT, and could reach a market capitalization of over 1.6 trillion USD by 2030.

According to a new report published on April 24 by Citi Group's Global Perspectives & Solutions unit, stablecoins are currently transitioning from cryptocurrency-focused applications to broader use cases in the financial and public sectors.

This transition is driven by increasing regulatory clarity, strong interest from institutions, along with demand from global markets for digital assets priced in USD.

The report compares the early stage of the adoption of ChatGPT with the current stage of stablecoin development, with 2025 being a crucial time when they become more integrated with the global economic system.

According to Citi's optimistic scenario, the stablecoin market could reach a total market capitalization exceeding 3.7 trillion USD by 2030. Currently, the stablecoin market stands at over 230 billion USD, an increase of nearly 30 times over the past 5 years.

The potential of holding stablecoin treasury. | Source: Citigroup## Demand from institutions and macroeconomic factors

Citi's report identifies progress in regulatory development, particularly in the US and Europe, as a key factor helping stablecoins expand beyond their initial role in cryptocurrency transactions and DeFi.

The new draft law in the US is expected to be introduced in early 2025 to establish a legal framework for the issuance and reserve of stablecoins. Meanwhile, the EU's MiCA regulation has established standards across the region.

This wave of regulation is occurring simultaneously with demand from emerging markets, where access to the dollar is limited, along with financial institutions exploring stablecoin infrastructure for payment transactions, settlement, and liquidity management.

The report notes that banks and payment service providers are beginning to integrate stablecoins into existing financial systems, removing barriers that have previously limited stablecoins to cryptocurrency use. Specifically, Citi forecasts that demand for stablecoins will create a new source of buying activity for U.S. Treasury bonds.

Safe asset issuers with high liquidity can hold more Treasury bonds than any country currently, adding over 1 trillion USD to Treasury bond demand under the bank's baseline scenario.

Expanding use cases beyond cryptocurrency

Although cryptocurrency trading remains the largest application, accounting for 95% of the current stablecoin volume, Citi forecasts growth in areas such as B2B cross-border payments, consumer remittances, and capital market activities of institutions.

Emerging markets such as Argentina, Nigeria, and Turkey are also contributing to the adoption of stablecoins in the retail sector, as they become tools for hedging against inflation and currency volatility. At the same time, remittance corridors are gradually shifting from traditional channels to remittance flows using stablecoins due to lower costs and faster payment times.

On the institutional side, major asset managers and fintech firms are experimenting with stablecoin-based payments for funds, operating treasuries and providing liquidity, reflecting confidence in the infrastructure and regulatory environment.

Citi compares the growth potential of stablecoins to the card payment industry, stating that while a few dominant issuers may emerge, public-private models and national enterprises will also thrive. This could be similar to the development of regional card networks in countries like Brazil and India, where domestic regulations support local financial sovereignty. The report emphasizes the importance of trust, transparency regarding reserves, and user experience in determining which stablecoins will achieve mainstream adoption.

The report also notes that the long-awaited regulatory clarity has removed one of the biggest barriers in the industry, allowing both traditional competitors and challengers to build services on a more predictable legal framework.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making any decisions. We are not responsible for your investment decisions.

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