The global stablecoin market is poised for significant growth, with the Citi Institute projecting a base case valuation of US$1.6 trillion by 2030.

Under more optimistic conditions, the market could reach US$3.7 trillion, while a more conservative outlook suggests it may cap at US$500 billion.

The total value of stablecoins stood at US$234 billion as of March 2025, implying that even in the worst case scenario, this market would grow by staggering 114% within the next five years, a new report by the research unit projects. Meanwhile, the bull case suggests a potential surge of nearly 1,500%.

These scenarios reflect varying assumptions about market dynamics, regulatory environments, and technological adoption.

Among the key drivers of stablecoin adoption is their potential to serve as a digital replacement for cash, offering a more accessible and reliable store of value and medium of exchange, especially in economies where fiat currencies are unstable.

Furthermore, their 24/7 functionality makes them well-suited for cross-border transactions and could lead individuals and businesses to shift a portion of short-term savings into stablecoin holdings.

Finally, increasing institutional adoption of cryptocurrency and blockchain technology will further reinforce the relevance of stablecoin. As traditional financial institutions deepen their engagement with digital assets, stablecoins will become integral to liquidity movement, crypto trading, and on-chain settlements, offering instant, low-cost, and low-friction financial transactions.

In contrast, the bearish scenario foresees limited usage of stablecoins, confined primarily to the crypto ecosystem. This scenario envisions modest penetration, with adoption being focused on select cross-border use cases primarily in markets with illiquid currency, and broader adoption being constrained by geopolitical resistance to digital dollarization. Widespread adoption of central bank digital currencies (CBDCs) could further hamper stablecoin usage.

In this scenario, stablecoins are expected to plateau at US$300-500 billion and have limited relevance in the mainstream economy.

Current and emerging use cases

Today, the vast majority of stablecoin activity, around 90% to 95%, is tied to trading digital assets. In this use case, stablecoins facilitate liquidity within crypto exchanges and decentralized finance (DeFi) platforms.

A smaller but growing use case involves banks and financial institutions using stablecoins internally or for interbank settlement. This use case represents a limited, and potentially high impact slice with the market, with up to 10% of the total addressable market (TAM).

Cross-border business-to-business (B2B) payments, a field still plagued by inefficiencies, stablecoins are poised for growth, promising reduced transaction times and costs. With global B2B flows in the tens of trillions of dollars annually, even a small shift toward stablecoins could translate to 20% to 25% of the long-term stablecoin TAM.

Another promising use case for stablecoins is consumer remittances. With lower fees and faster speed, these digital currencies are poised to capture a significant share of the US$1 trillion remittance market, projected to account for 10% to 20% of the market in high-adoption scenarios.

Institutional trading and capital markets are another promising area, with stablecoins expected to accelerate the settlement of trades, especially in tokenized securities markets. Modest adoption in this industry could represent between 10% to 15% of the overall stablecoin market.

Stablecoins and blockchain technology for broadly also hold significant potential in the public sector. For example, governments can use blockchain to track public expenditure in real-time, reducing corruption, and improving the reliability of financial reporting.

The technology also enables direct and transparent disbursement of financial aid and government subsidies, ensuring that social security benefits, unemployment aid, and agricultural grants, reach the intended recipients.

Blockchain can also be used to digitize and secure citizen’s data, including identity, medical history and land record, preventing manipulation, and fraud, as well as reducing potential legal disputes. It can also serve as the foundation for digital identity, providing secure, tamper-proof verification for citizens

Finally, governments can use blockchain to issue digital bonds, making it easier and more efficient for people to invest, increasing trust, and reducing the need for middlemen.

The rise of stablecoins

The stablecoin market has risen dramatically over the past five years, growing 30x since 2020. Today, this market is led by Tether (USDT), which controls about 62% of the market, followed by USD Coin (USDC) at 25%, data from DefiLlama show.

USDT, a cryptocurrency stablecoin launched by Tether in 2014, and USDC, introduced in 2018 by a joint venture between crypto companies Circle and Coinbase, are both pegged to the USD.

To fend off escalating competition from the cryptocurrency industry, the biggest banks in the US are currently contemplating teaming up to issue a joint stablecoin. The conversations have so far involved companies co-owned by JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and other large commercial banks, including Early Warning Services, the operator of the peer-to-peer (P2P) payment system Zelle, and the Clearing House, the real-time payment network, people familiar with the matter told the Wall Street Journal earlier this week.

These developments are closely tied to forthcoming stablecoin legislation in the US, particularly the bipartisan GENIUS Act. This bill proposes regulatory standards for payment stablecoins, including requirements for reserve management, transparency and oversight.

Featured image: Edited by Fintech News America, based on images by thanyakij-12 and jimjemrangga via Freepik